Krungthai Bank (KTB), the country's fourth-largest lender by assets, estimates its loans outstanding will grow less than 2% this year, missing its 5-7% target, as a major portion of lending borrowed by credit cooperatives was refinanced to other banks.
Around 50 billion baht worth of loans extended to credit cooperatives was refinanced, leaving the bank's credit cooperatives loans outstanding at 70 billion, said president Payong Srivanich.
The bank's policy to halt new loan extension to rice millers following the sector's high non-performing loans (NPLs) also deterred KTB from reaching the lending target, he said.
The bank's loans outstanding for rice mill business amounts to 70 billion baht.
KTB plans to focus on rice millers' debt-servicing discipline and will offer debt rescheduling if it is necessary, said Mr Payong.
At the end of September, KTB's loans outstanding rose 2.2% from the end of 2017 to 1.98 trillion baht. Of the total, large corporate loans accounted for 33.2%, government and state enterprise loans represented 9.3%, small and medium-sized enterprise loans were 17.7% and retail loans made up the rest.
He said KTB aims to lower its bad loans to below 100 billion baht this year, keeping its NPL ratio at 4.2% or below next year.
To bring down NPLs, the bank wants to concentrate on debt restructuring before loans turn sour.
Bad loan disposal is also an option, said Mr Payong.
Its gross NPLs totalled 110 billion baht, representing 4.2% of total loans, at the end of September.
The bank expects to set a 5% loan growth target for 2019 based on Thai economic growth of 4.3%, he said. Retail and large corporate loans are its focus.
KTB plans to adopt technology to support loan extension, increasing its access to consumers and reducing operating costs.
The bank's first-quarter net profit jumped 33.5% to 7.84 billion baht, driven by a 38.7% drop in impairment costs for loan losses to 6.08 billion baht.
Gross NPLs rose to 4.42% of loans outstanding at the end of September from 4.19% at the end of last year.
KTB shares closed on the Stock Exchange of Thailand yesterday at 20.10 baht, an increase of 20 satang, in trade worth 376 million baht.