Thai Credit Retail Bank (TCRB) has refined its focus to the niche microfinance market following a shareholder and management restructuring, hoping to set itself apart from its larger peers.
Gunara: Expertise is a core value
This segment includes small business, gold-for-cash loans and motorcycle leases in particular, as TCRB has scaled back its mortgage and used car loans due to intensified competition from larger banks and smaller margins, said Roy Agustinus Gunara in his first interview after taking the helm at the bank.
Given its small asset size and restricted network, it is difficult for TCRB to compete with the 14 larger local banks, he said.
He added small business owners who don't have a financial track record and require a credit line of no more than 5 million baht are the bank's key target. These businesses, which typically have only one to two employees, make up 95% of the country's businesses, so there is vast room to grow without the competition.
Mr Gunara, 45, was promoted as the bank's top executive last August following restructuring. Prior to joining TCRB, Mr Gunara worked at the Singapore-based Fullerton, a microfinance provider for Temasek Group. He was also head of consumer banking business at Bank of Ayudhya (BAY) for 12 years.
The country's second-largest life insurer, Thai Life Insurance, diluted its shareholding in the small bank to 23.65% after Northstar Group, Asia's leading equity fund, bought the bank's new shares issued last year through its investment arm, Polaris Capital Investment. Polaris Capital then became TCRB's largest shareholder with a 25% stake.
TCRB, with an asset size of 23.90 billion baht and 80 branches, is recapitalising by increasing its registered capital to 3 billion from 2.5 billion through a rights offering. The capital increase will strengthen its capital adequacy ratio from 15.86% of risk-weighted assets at present.
The bank aims to triple its outstanding lending to 60 billion baht by 2016 from 20 billion now. Risk management is key to preparing for the growth goal, said Mr Gunara.
"Judging people is important to improving our risk management, especially for the microfinance segment. We have to train our staff to understand customers. Expertise is a core value rather than collateral assets," he said.
The bank wants to keep non-performing loans (NPLs) at no more than 3% of the total loan portfolio. NPLs stand at 2.29% now, down sharply from a peak of 4.93% last November.
The bank projected new loan expansion of 16.30 billion baht, or 30% growth this year, with 5 billion in vendor loans.