Changes on the cards at SME Bank

Changes on the cards at SME Bank

The board of the state-run Small and Medium Enterprise Development Bank of Thailand (SME Bank) has approved a major revamp by adding two new business lines and offering early retirement.

The board also approved allocating 30% of net profit to develop SMEs.

The moves are aimed at making it truly become the bank for the development of SMEs, chairwoman Salinee Wangtal said.

She said the board initially capped the allocation at 350 million baht of annual net profit to buy innovations and let SMEs access them.

The money will also be used to help SMEs build up their marketing and distribution channels as well as to hire coaches to support these businesses.

SME Bank will also introduce an early retirement scheme.

A total of 60 executives at the director to senior executive vice-president levels and aged 52-57 will be eligible.

Those applying for the scheme will receive 30 months' severance pay.

In the meantime, president Mongkol Leelatham said SME Bank's lending hit a monthly record high of 5.74 billion baht last month thanks to strong demand for government soft loans and its own policy loans.

The state-controlled bank's outstanding loans amounted to 90.1 billion baht in the first month of this year.

The bank's non-performing loans (NPLs) went up by 143 million baht to 23.4 billion at the end of January due to a higher level of distressed retail loans to rubber growers, Mr Mongkol said.

However, its NPL ratio had fallen to 26.2% on Jan 31 from 27.2% on Dec 31, as lending grew at a faster pace than bad loans did.

The bank is closely monitoring borrowers struggling with a cash crunch and may reduce their monthly instalment payments to alleviate their financial burden, Mr Mongkol added.

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