Bangkok--15 Aug--Thitikorn
- Four new branches were opened during the first half of 2013 and six more branches will be opened within this year
- TK is confident to keep target loan growth of 10% under normal economic and political conditions
Thitikorn Public Company Limited “TK”, Thailand’s leader in motorcycle hire purchase reported its operation result of the 2nd quarter to the Stock Exchange of Thailand (SET) that its managed to grow its loan growth at 5.8% with net account receivable stood at 9,150 million baht at the end of second quarter 2013.
Prathama Phornprapha, Managing Director of TK, said although the consumers purchasing power had declined, TK will maintain its loan growth target of 10% for 2013. During the first half of this year, TK loan growth was 5.8% while its net profit for the second quarter 2013 decreased by 38.7% to 105.9 million baht comparing to the same period of last year of 172.9 million baht.
Due to drastic economic slowdown during the second quarter, TK to decided to accelerate the increase in provision of Bad debt and doubtful account, write off and selling of older repossess motorcycles models, since last year major motorcycle manufacturers launched more than 20 new models. The mentioned policy will have some negative impact to TK operation in the short term but will be beneficial to medium and longer terms.
“TK is confident that in the second half of this year, we will be able to maintain our original loan growth target under normal economic and political conditions. We are now continuously expanding to provinces to maintain our growth momentum,” said Miss Prathama.
TK will keep its expansion plan in the provincial in order to capture its growing demand. Since the beginning of the year, TK has opened four new provincial branches pushing number of nationwide branches of TK to 87. TK plans to open additional six more provincial branches in the second half of this year. The expansion in the provincial will propel TK to replicate domestic motorcycle market, which consist of 80% sales in the provincial and 20% Bangkok.
Currently, TK originate its motorcycle finance business around 65 to 70% in the provincial. TK expects by 2015, its provincial business potion will reach 80%.
Miss Prathama said the domestic motorcycle market during May and June decreased by more than 10% compared to same period last year due to lower consumers’ purchasing power and Government had a plan to reduce the budget of rice pledging scheme together with substantial increase in household debt. In the first half of this year, the motorcycle sales volume was 1,097,388 units slightly reduced by 0.55% compare to the same period last year of 1,103,486 units.
She added that domestic motorcycle market in third quarter will be quite slow due rainy season and will pick up again during the last quarter as it is “High season”.
Meanwhile, Mr. Prapol Phornprapha, deputy managing director, added that the competition in the motorcycle hire purchase had been very fierce and the competitors had offered a very aggressive marketing campaign, especially lower interest rate and down payment. The fierce competition has caused TK to increase our marketing costs. However, TK has tighten our approval process of new customer through own owned developed computerize system and credit scoring as well as credit officer physical inspection of customer credit worthiness.