Bangkok--25 Jan--KASIKORNBANK
KBank aims to become the "One Stop Financial Solutions" provider in 2016 to help customers mobilize funds at suitable costs and build business networks. Lending growth in large corporations and SMEs are targeted at 6 percent and 7 percent, respectively. Three major movements are expected this year—more fund raising through capital markets, improvement in business liquidity, and telecommunications network extension.
According to Mr. Patchara Samalapa, KASIKORNBANK Executive Vice President, KBank's Corporate Business Division—supervisor of large business customers—performed well and met its target as total loans grew 4 percent to 468 billion Baht as of the end of 2015, while total revenues stood at 21 billion Baht, a growth of 10 percent YoY. In 2016, the division expects net loans to grow 4-6 percent and revenues to expand 8-9 percent.
At the same time, SME Business Division also thrived. As of the end of 2015, the division's total loans increased 7 percent to 613 billion Baht, with a total revenue of 43 billion Baht, an 8-percent rise. This year's growth targets are 5-7 percent for loans and 4-6 percent for revenues.
In 2016, KBank aims to become the "One Stop Financial Solutions" provider for businesses and to offer financial products to accommodate all customer's needs, including managing capital at suitable costs, facilitating financial transactions via digital banking, and building business network to enhance customers' efficiency.
KBank plans to provide support, including long-term loans and working capital, to customers throughout the value chain, from upstream through to downstream, as well as assisting in their cash management—both incoming and outgoing transactions—through the digital banking service, with evidence for fund movements and goods transport. Small and medium enterprises will have greater chances to access funding sources. The plan also accommodates the government's policy to promote a shift from cash-based to online transactions.
Meanwhile, KBank's large business customers are well capable of mobilizing funds, as is evident in their low debt-to-equity (D/E) ratio. The Bank is well prepared to offer financial consultancy for customers seeking to raise funds through capital markets, such as in stock markets through the initial public offering (IPO) and real estate investment trust (REIT), or to explore foreign investment opportunities—more than 90 percent of funds will be invested in the AEC+3 bloc.
Mr. Patchara added that Thailand's economy slowed in 2015, causing household debt to GDP to rise. The majority of Thai households consists of persons in the trade business; their revenues dropped but expenses did not follow suit. KBank offered financial support to customers throughout last year, e.g., grace period on principal, extension on installment payment, or installment plans that match customers' income. Support from KBank was also aimed at increasing liquidity for customers and helping to decrease national household debt.
In 2016, KBank foresees three significant movements. Firstly, fund mobilization through capital markets will be more intensive as customers' demand for loans is greater than banks' lending ability. Therefore, relying on funds from capital markets is extremely vital for business growth. Secondly, excess inventory will likely decline from last year, which will help increase liquidity for businesses. Finally, as a sophisticated infrastructure is crucial for Thailand's entry into an era of digital society, the extension of telecommunications network system to provide full coverage across the country is very important for driving the economy.