Krungsri Consumer, an unsecured-loan lender under Bank of Ayudhya (BAY), plans to commence its auto and personal loan joint venture in Laos in July.
BAY's two financial arms _ Krungsri Consumer and Ayudhya Capital Auto Lease (Krungsri Auto) _ each own 35% of Krungsri Financial Service (Laos), with the balance held by a Laotian auto lender.
The joint-venture agreement is scheduled to be signed today and business operation will kick off from July 1, said Thakorn Piyapan, Krungsri Consumer's managing director.
The bank earlier studied business expansion into three neighbouring countries _ Laos, Cambodia and Myanmar. It chose Laos due to clearer regulations as well as closer relations with Thailand and a similar culture.
Laos has a population of only 6 million and gross domestic product growth that is smaller than Thailand's, but the country has high growth potential amid fast economic development, said Mr Thakorn.
Since BAY, Thailand's fifth-largest bank by assets, has two branches in Vientiane and Savannakhet, it decided to expand its foothold there.
There are six or seven auto leasing lenders in Laos including the Thai company Thitikorn.
"The local partner entered into auto and personal loans in the Laotian market less than a year ago, attracted by stronger spending, particularly in vehicles, electric goods and mobile devices. Our consumer finance there will mainly put focus on the segments," said Mr Thakorn.
Krungsri Consumer, which offers credit card and personal loan products, plans to maintain its leadership position in the business area.
It now has 3.12 million credit cards and 2.79 million accounts in personal loans.
It targets to expand the number of its client base to 6.5 million by year-end from 6.22 million at the end of March.
The company plans to increase its card spending by 16% to 287 billion baht and outstanding loans by 9% to 110 billion.