KTB quick to embrace universal leasing

KTB quick to embrace universal leasing

KTB Leasing, a financial subsidiary of Krung Thai Bank, aims to be a universal leasing company and to expand its assets to 100 billion baht in the next three years.

Its loans will cover cars, motorbikes, boats, aircraft, helicopters, tractors, bicycles, machinery and equipment, electrical goods, computers, tablets and mobile phone devices.

The service also includes commercial loans for small businesses, said managing director Pinyawat Chantrakantanond.

"We can say that KTB Leasing is the country's first and only universal leasing company," he added.

KTB Leasing's total assets at the end of last year were 35 billion baht, rising from 17 billion the year before.

It aims to expand its asset size to around 60 billion baht by the end of this year, with loan growth targeted of at least 30 billion. Assets are expected to reach 100 billion baht in 2016.

Mr Pinyawat said the company plans to mobilise funding of around 50 billion baht for expansion this year, of which 20 billion will come from debentures, which it is using for the first time. The other funding will be supported by Krung Thai Bank's loans.

KTB Leasing next month plans to issue one-year bonds worth 10 billion baht with an AA- credit rating from Fitch Rating (Thailand).

Another 10 billion baht of bonds with maturity of 3-5 year years are expected to be offered in April.

Both bond issues will be allocated to institutional investors only.

Mr Pinyawat said the company expects to reduce financial costs by 20-30 basis points if the bonds have a coupon rate of about 3% per year.

KTB Leasing will expand business aggressively this year by improving infrastructure, processes, networks and risk management.

Innovative service will be another key factor to support loan growth, with the speed of loan approval being cut from a few days to about 30 minutes.

Mr Pinyawat said the company's non-performing loans (NPLs) are 1% of total debts outstanding, but it aims to lower that figure by the end of the year.

KTB Leasing approved 10,000 loans under the government's first-time car buyer scheme. Only three of the 7,500 cars already delivered have been classified as NPLs.

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