Siam Commercial Bank (SCB) expects retail loan growth to continue at a single-digit pace for a second straight year as soaring household debt and tumbling farm prices dampen demand, says president Kannikar Chalitaporn.
The country's third-biggest lender by assets regularly delivered double-digit growth in retail lending over the past decade before stuttering as the first-time car buyer tax rebate lapsed and political protests erupted in late 2013.
Kannikar: Long-term regional strategy
The bank wants to keep its guard up against risks.
SCB, the country's biggest mortgage lender with a portfolio of 512 billion baht, will continue to deliver growth in housing loans, Mrs Kannikar said without specifying a target.
As of September 2014, the bank's loans outstanding totalled 1.73 trillion baht, of which 628 billion was corporate loans, 339 billion SME loans and the rest retail loans.
Amid expected lacklustre new-car sales and prevailing economic uncertainties, SCB plans to conservatively expand its auto loan business.
The bank's auto lending fell by 9.4% from year-end 2013 to 172 billion at the end of September.
SCB aims for 5-6% lending growth in 2015, with corporate and SME loans as the main driver. The bank predicts full-year economic growth of 3.5%.
Although the prospects of an economic recovery remain uncertain this year, a kick-start of the state's 3-trillion-baht infrastructure plan and a stable political situation could encourage companies to invest and stoke demand for loans and financial services.
Separately, SCB is seeking the Vietnamese central bank's nod to hold the entire stake of Vinasiam Joint Venture Bank, citing greater flexibility in management.
SCB owns 33% of Vinasiam Bank, which has eight branches in Vietnam. The state-owned Vietnam Bank for Agriculture and Rural Development owns 34% and Charoen Pokphand Group holds 33%.
The bank has mainly used the partnership model to expand its international banking business amid intensifying competition in Southeast Asia, though strategies and methods depend on the realities of each foreign market.
Large Thai commercial banks are rushing to build networks and serve customers in new growth centres like Cambodia, Laos, Myanmar and Vietnam.
Apart from Vinasiam, SCB has nine branches in Vietnam. It has four branches in Cambodia, a branch in Laos and a representative office in Myanmar.
"We have set a long-term international banking business strategy for the next 10 years, especially in Asean, to prepare for regional high growth potential in the long run," Mrs Kannikar said.
SCB shares closed yesterday on the Stock Exchange of Thailand at 179 baht, down three baht, in trade worth 1.04 billion baht.