K-Leasing projects 5% portfolio uptick

K-Leasing projects 5% portfolio uptick

Kasikorn Leasing (K-Leasing), Kasikornbank's auto lending arm, aims for 5% growth in its loan portfolio this year after falling slightly last year.

Improving domestic car sales and economic momentum were reasons for the company's expected loan growth.

K-Leasing wants its loan portfolio to rise by 5% to 93 billion baht this year, though it grew only 0.5% year-on-year to 89.4 billion at the end of June, said executive chairman Thawee Teerasoontornworn.

Its loans outstanding edged down by 1.2% in 2015 to 88.7 billion baht after peaking at 89.8 billion the previous year. The loan contraction was largely the result of effects wearing off from the Yingluck Shinawatra administration's populist excise tax refund scheme the first-time car buyers.

Even though the scheme, blamed for stealing future demand, ended at the end of 2012, car owners that applied for the tax refund were allowed to take delivery in following years because of the overwhelming demand, which helped support the auto lending industry until 2014.

He said the country's new car sales have continued to improve and are expected to contract less this year.

Kasikorn Research Center forecast Thailand's new car sales in 2016 would total 774,000 to 770,000 units, down 4-7% from the preceding year. For the seven months to July, auto sales were down 0.2% from last year to 428,898, reported the Federation of Thai Industries.

K-Leasing showed healthy new loan growth of 35.3% year-on-year in the first half to 41.2 billion baht. Of the total, 18.1 billion were auto loans to consumers and the remainder was floor plan lending -- loans for car dealers to purchase inventory. The company reported 18.3% growth in new auto loans and a 52.5% rise for floor plan lending.

The auto lender also managed to control non-performing loans at 1.54% of its total as of June, setting an annual cap of 1.7% this year.

K-Leasing posted a net profit in the first half this year of 335 million baht. It aims for 682 million for the full year.

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