Bangkok--11 Dec--KASIKORNBANK
KASIKORNBANK successfully achieved as much as 516.17 billion Baht in SME loans, a growth of 10 percent, in 2013. The Bank’s plan for 2014 will focus on improving staff efficiency to maintain existing SME customers and boost the new customer base particularly those who are unable to access funding sources, under its slogan “K SME Full Support for SMEs”. With this initiative, KBank expects SME loans to increase between 9-11 percent to 571.98 billion Baht in 2014. According to Mr. Patchara Samalapa, Executive Vice President of KASIKORNBANK, KBank has consistently placed significance on SME operators; providing loans to meet SME demand for funding sources. The Bank’s SME Business Division recorded a total of 516.17 billion Baht in SME loans in 2013, up 10 percent from 2012, with total revenues of 35.2 billion Baht or an increase of 13 percent from 2012. Non-performing loans stood at 3.05 percent, down from 3.20 percent in 2012.
In 2014, the Bank hopes to see SME loans rising to 571.98 billion Baht or by an approximate 9-11 percent growth rate, with total revenues of 39.68 billion Baht or an increase of 13 percent, and NPL target further reduced to 2.55 percent. The division emphasizes efficient operations in order to satisfy stakeholders including the Bank’s staff, customers and shareholders, with an increase in the service satisfaction index, being set at 77 percent within 2014, up from 75 percent in 2013.
Mr. Patchara added that the Bank plans to continue SME business operations in 2014 under a slogan of “K SME Full Support for SMEs” with three main strategies. Firstly, a staffing strategy will be applied in order to boost efficiency by reducing unnecessary consumer coverage territories and irrelevant operations for more efficient customer service delivery. Secondly, an existing customer retention strategy is to be implemented by offering adequate loans for their business expansion, with easier credit terms; improved staff operational efficiency and regular customer visits. As a result, customers will likely use the Bank’s services more often and with greater satisfaction.
Thirdly, the Bank will apply a new customer acquisition strategy by offering credit facilities particularly to those who are not able to access alternative funding resources, including business operators who are cash-based businesses with limited banking transactions and perhaps lacking collateral to underwrite loans. This group of SMEs has found it difficult in the past, to access official funding resources. Therefore, appropriate loan products will be offered to meet this demand.
Mr. Patchara added that the Bank’s SME loan growth targeted at 9-11 percent for 2014 is in line with the current economic slowdown. It is a challenge for commercial banks to impose prudent risk management in order to maintain growth along with loan quality. Current political uncertainties may also have an impact on overall investment across the government and private sector, while parts of funds may flow back to the US market following widely-expected quantitative easing (QE) tapering. In addition to these concerns, household debt in Thailand may result in tightening of domestic liquidity which will consequently impact growth of overall working capital and long-term loans.