Kasikorn Leasing, a subsidiary of Kasikornbank, could normalise its loan-loss reserve settings in the fourth quarter of the year thanks to the country's improving economic outlook and the company's steady non-performing loans (NPLs).
The auto leasing firm set aside loan-loss provisions higher than were required by the Bank of Thailand in the second quarter because of negative economic trends at that time. Stringent risk management has allowed the firm to control bad debts in the auto sector at 0.83%, with total outstanding loans of 86.81 billion baht.
Executive chairman Isara Wongrung said the company would book better net profit in the fourth quarter if it set loan-loss provisions more in line with the central bank's guidelines. That means it would convert the existing excessive reserve to profit.
However, the matter has not been finalised yet, said Mr Isara.
For the first nine months of the year, K-Leasing posted a net profit of 115 million baht. It booked new loan expansion of 55.73 billion, resulting in total outstanding loans of 86.81 billion, or 89.7% of its full-year target of 96.79 billion.
The company expects overall hire-purchase loans to grow 18% this year, down from 34% the year before when the government's first-time car buyer scheme drove extraordinary growth.
K-Leasing plans to focus on the big bike market the last quarter of the year. Big bike sales are expected to reach 70,000 units this year, up 45% from 2012 despite a slowdown in car sales.