Thailand
Thailand: BAY targets 10% rise in retail loans
Bank of Ayudhya (BAY) aims for 10% growth in retail lending and keeping its bad loan ratio at 2.6-2.7% next year, says a senior official at the bank.
The 10% growth translates into 100 billion baht worth of new loans in 2019, said Phonganant Thanattrai, head of retail banking and the distribution group.
The bank expects outstanding retail loans will reach 300 billion baht this year, up 10% from last year. BAY’s retail loan portfolio comprises mortgages and personal loans.
BAY’s solid retail loan growth has been largely propelled by mortgages, he said. The growth rate of mortgages is expected to slow to 10% in 2019 from 11% projected for this year as the Bank of Thailand implements more stringent measures, said Mr Phonganant.
The bank, however, fully supports the central bank’s macro-prudential policy to govern housing loan products, he said.
The tougher mortgage rules, aimed at curbing mortgages for homes priced from 10 million baht and multiple mortgages to improve credit standards and ward off speculation, is set to start on Jan 1, 2019.
The bank plans to roll out digital mortgages and personal loans on its mobile banking app, KMA, under the Krungsri iFIN feature.
The bank has launched digital lending service from late March and there have been around 30,000 loan applications so far.
The loan approval rate is still small at around 5-10%, and none of the digital personal loans have turned sour.
BAY targets personal loans to grow 2% next year, the same rate as this year.
Despite the digital transaction fee waiver, the bank expects fee-based income for retail businesses will expand 9% this year and 10% next, driven by bancassurance and mutual fund sales.
He said BAY is negotiating with potential banking agents and expects more than one will become new agents for the bank next year, joining Thailand Post and Forth Smart Service Plc.
BAY yesterday introduced a new branch model, Smart branch, equipped with automatic machines for self-service transactions and full-time staff presence for advice. The number of smart branches is to rise to 12 by the end of next year, with two outlets set to open this year.
Smart branches is one of BAY’s four branch models. The others are smart kiosk, a kiosk with automatic machines for self-service transactions with more limited staff presence for advice; partnership branch, a special branch jointly run with other organisations such as universities; and traditional branches.
Against the backdrop of branch downsizing in the industry, BAY plans to raise branch numbers to 664 at the end of this year and 666 next year from 662.
Source: https://www.bangkokpost.com/business/news/1568738/bay-targets-10-rise-in-retail-loans