KTB branches out to non-state clients

KTB branches out to non-state clients

State-owned Krungthai Bank (KTB) has stepped up efforts to attract more private-sector workers as clients in order to balance the retail lending portfolio and achieve double-digit retail loan growth.

A shopper is talking on the phone while wandering in a shopping plaza in Bangkok. Economists see falling oil prices will lead to higher increase in disposable income to people, providing abundant growth opportunities for KTB. THANARAK KHUNTON

Given that the country's second-biggest lender by assets is a novice player in several retail banking areas, growth opportunities abound for the bank, said first executive vice-president Tanyapong Thamavaranukupt.

Employees of privately owned companies are the bank's major target group. Most of KTB's retail loan customers are state officials.

In September, the bank unveiled a personal loan product called Super Easy as a pilot project offering non-state clients an 18% interest rate. The borrower's minimum income requirement is 18,000 baht a month.

Lenders now charge personal loan borrowers 20-25% in interest, below the central bank's ceiling rate of 28%. The market's minimum income requirement for personal loan borrowers averages 10,000 baht a month.

"Because we are a newcomer, we can fill a gap in the market by selecting suitable customers and offering them a lower price," Mr Tanyapong said. "As importantly, we can control asset quality."

Although the Super Easy product is well received, KTB will decide whether to extend it after it expires in February.

The bank serves about 25% of state officials and also has a provincial client base. It handles 10 million accounts for retail depositors and borrowers, of whom 3 million are state employees.

Its loans outstanding total 1.8 trillion baht, with retail loans constituting 627.83 billion baht or 35%.

KTB shares closed Friday on the SET at 22.50 baht, down 10 satang, in trade worth 758 million baht.

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