Kasikornbank's (KBank) corporate loan business will focus on syndicated loans to diversify risk as its corporate loan segment posted high single-digit growth in the first half.
The country's fourth largest lender by assets has several syndicated loan deals worth hundreds of billions of baht in the pipeline, said executive vice-president Suwat Techawatanawana. The deals are for infrastructure projects, mergers and acquisitions, and project financing.
With commercial banks' larger capital base, the minimum amount of syndicated loan today is generally 10 billion baht, compared with 2-3 billion in the past.
After the 1997 financial crisis, the Bank of Thailand imposed a single lending limit rule, restricting loan to a particular group of companies at 25% of each bank's first-tier capital. The requirement has compelled banks to lend through syndicated loans for deals requiring hefty lending.
KBanks' corporate loan demand improved in the second half, fuelled by the government's investment projects, and export and economic pickups. However, the bank is keeping its wholesale loan growth target for this year at 4-6%, despite delivering a 8.2% growth in the first six months, Mr Suwat said.
KBank's corporate loan amounted to 554 billion baht at the end of June, compared with 512 billion at the end-2016. The strong growth was attributed to loan demand for working capital and export growth, he said.
The bank's corporate loan business delivered an 8% year-on-year increase in revenue to 12.2 billion baht for the six months to June. Fee-based income, particularly in advisory and transactional services, contributed higher income to KBank's corporate loan business than interest income.
Mr Suwat said the bank would continue to develop digital platform as required. Digital services are currently available for cash pooling service, K+ merchant, WeChat and AliPay, and letter of guarantee (LG) on blockchain.
The bank managed to control non-performing loans (NPLs) of its wholesale business satisfactorily, though some customers have entered into debt restructuring programme, he said.
KBank aims for no more than 2% in NPLs for corporate lending at the end of this year amid the strong loan growth. The bank also limits loan portfolio of each business sector at 12% of its corporate outstanding loans to diversify risk.
KBANK shares closed yesterday on the SET at 194 baht, up 50 satang, in trade worth 676 million baht.