Client selection will be a key strategy for Krung Thai Bank’s (KTB) corporate banking business this year to control asset quality during tough economic times.
The bank said it will focus mainly on 100 SET-listed companies, particularly global firms with solid financial conditions and high potential to expand, even in a slowing economy.
International business expansion will be another focus of the bank, said Werapong Suppasedsak, executive vice-president for corporate banking.
With its selective client strategy, the bank is likely to finance fewer clients this year than last. But it expects demand for loans will be lower this year given the slowdown in business expansion and the overall economy. The bank is willing to finance mid-sized companies with sound financial backgrounds.
Wholesale loans will drive banking industry loan growth this year as small and medium-sized enterprises (SMEs) and the retail banking business have been suffering under the political deadlock, he said.
For the first two months of the year, the bank showed positive corporate loan growth despite sluggish loan demand from SMEs and retail business, said Mr Werapong. But the bank plans to cut its wholesale loan growth target this year from 6-7%.
“The asset quality of our wholesale banking business remains positive and no customers are demanding debt restructuring,” he added.
KTB recently cut its total loan expansion target this year to 4.5% after readjusting the country’s 2014 GDP projection to 3.5%.
“Normally we set our corporate loan growth target at 1.5 times the country’s GDP. If the business segment can remain on a positive trend until the end of the first quarter, we will not need to cut our growth target despite adjusting the bank’s total loan expansion,” Mr Werapong said.
The indefinite suspension of the government’s 2-trillion-baht infrastructure investment plan will affect loan demand from the construction sector. But he expects the industry to still grow at a slower pace.