KKP targets 6% loan growth

KKP targets 6% loan growth

Kiatnakin Phatra Financial Group (KKP) aims for 6% lending growth this year and is set to be the country's first financial institution to offer Lombard loans to serve high-net-worth customers.

Kiatnakin Phatra Financial Group president Aphinant Klewpatinond (centre), Kiatnakin Bank head of finance Chavalit Chindavanig (right) and Phatra Capital and Phatra Securities president Krittiya Veeraburus attend a press briefing.

Corporate loans will expand 20% and commercial loans will double this year, president Aphinant Klewpatinond said.

The group's loan targets are based on an assumption that the country's economic growth will come in at 3.5% this year.

Its outstanding loans amounted to 190 billion baht at the end of last year. Auto loans accounted for 120 billion, commercial loans for 50 billion and corporate loans for 20 billion.

Mr Aphinant said Lombard loans would enhance the group's ability to serve high-net-worth customers. It managed assets worth 284 billion baht at the end of 2014.

Lombard credit is a collateralised loan backed by equities and bonds. The loan is secured by individuals to invest in assets that are expected to generate high returns.

Such loans carry greater risks than normal loans, but lenders may not need to set aside provisions for the credit facility as it is fully backed by liquid assets.

Kiatnakin's net profit last year plunged 40.3% from the previous year to 2.63 billion baht due largely to declines in commercial and auto loans.

Its revenue amounted to 14.5 billion baht, with 61% from interest and the remainder from fees and service income.

Its non-performing loans rose to 5.6% of its loan portfolio at the end of last year from 3.8% a year earlier.

Auto lenders' earnings have been hurt by the sharp fall in car sales after the expiry of the previous government's tax rebate scheme for first-time cay buyers.

Sales of new cars fell to 881,000 last year from a record high of 1.47 million in 2012, prompted by the tax refund programme.

Kiatnakin's two brokerage houses, Phatra Securities and KKTrade Securities, have market shares of 4.04% and 0.99%, respectively, of stock trading value, while its mutual fund arm, Kiatnakin Fund Management, has assets under management of 32.3 billion or 0.85% of the industry's total.

Its private fund management has assets of 3.4 billion baht.

Meanwhile, Kiatnakin plans to expand its branch network from 86 now to more than 90 at the end of this year to provide better access for customers. It also plans to renovate its branches nationwide and relocate some of them.

Kiatnakin wants to find additional business partners. Generali Assurance (Thailand) has been its exclusive bancassurance partner for 15 years, while Kiatnakin will become a captive partner of Suzuki starting this month.

KKP shares closed yesterday on the SET at 40 baht, down 50 satang, in trade worth 43.8 million baht.

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