CIMBT plans targeted loan expansion

CIMBT plans targeted loan expansion

Mid-sized corporations, larger SMEs the focus

CIMB Thai Bank (CIMBT) plans to use its parent firm's strong regional network to expand its loan portfolio in the medium-sized corporate segment and larger SMEs.

The 93.5%-owned Thai unit of Malaysia's CIMB Group reported its debt outstanding for regional finance, both inbound and outbound credit, is 4 billion baht or 10% of its commercial loan portfolio dominated by medium-sized corporations and larger SMEs, said senior executive vice-president Surachai Chitratsenee.

It defines medium-sized companies as those whose annual sales are 1-2 billion baht and larger SMEs as those with annual sales of 400-500 million baht.

Currently, 35% of its commercial loan portfolio is lent to the former group and the rest extended to the latter.

The ratio will likely be split evenly by the end of next year, in line with the higher regional potential of medium-sized companies.

CIMBT's regional loan portfolio has been rising as the Asean Economic Community draws near.

Its Thai target groups in the hospitality, service and trading sectors are paying more attention to regional expansion.

Regional business operators, especially in Singapore and Malaysia, also intend to expand to Thailand, Mr Surachai said.

"Since we're a medium-sized bank with limited local networks, it's difficult for us to compete with large local banks in the SME loan market. But we have an edge in the region in the form of our parent's strong networks. This strength has attracted Thai customers to use our service for their regional expansion," he said.

Mr Surachai said CIMBT expects to achieve commercial loan growth of 30% this year despite booking less-than-expected first-half expansion of 10%.

The bank hopes the fourth quarter, which is the high season for business activities, and existing deals in the pipeline will facilitate loan expansion.

Most recently, CIMBT provided financial support of 1.9 billion baht to the Ichitan Group, Thailand's second-largest green tea producer, for the second phase of a factory in preparation for Ichitan's regional expansion.

It also opened a credit line for ISCM Industries (Thailand) and Integrated SCM Co, both subsidiaries of D'Nonce Technology Bhd, a listed company in Malaysia.

The CIMB Group has a presence in eight Asean nations - Malaysia, Indonesia, Thailand, Singapore, Cambodia, Brunei, Vietnam and Myanmar.

Shares of CIMBT closed Friday on the Stock Exchange of Thailand at 2.06 baht, down four satang, in trade worth 8.37 million baht.

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