Siam Commercial Bank (SCB) saw its digital lending grow at a faster pace than expected in the six months to June, prompting the bank to say full-year lending could reach 18-20 billion baht.
The bank extended 8 billion baht worth of unsecured loans through the mobile banking app SCB Easy during January to June, compared with a full-year target of 10 billion, said co-president Apiphan Charoenanusorn.
The simplicity, convenience and speed of digital loans are the key contributors to the significant growth, she said.
Credit card loans dominate SCB's digital lending at 70%, while personal loans make up the rest.
The bank's existing customers with monthly income of 30,000-50,000 baht are the big digital loan borrowers.
"With the high quality of the market segment, we can control non-performing loans of online lending at below 1% of the loan portfolio," Ms Apiphan said.
On average, SCB charges 18% interest for digital personal loans, in line with the low risk profile of the borrowers based on data analytics. Interest rates for traditional personal loans average 20%.
More digital lending features and education loans are in the pipeline, Ms Apiphan said.
For consumer secured-loan products, the bank offers auto hire-purchase loans on online-to-offline service, while mortgage loans need to operate on the offline channel because documents from government agencies are required.
Despite the leapfrog growth in digital lending, the country's largest lender by assets still managed to grow in the traditional lending channel.
SCB recorded 10% retail loan growth for the first half of the year and aims for 20% growth for the full year. The bank's retail lending expanded 10% last year.
The strong performance in retail lending growth is due to digital lending, Ms Apiphan said.
For mortgage lending, the bank aims for 5% growth this year, though the tougher loan-to-value regulations have dented demand, she said.
SCB is the country's biggest mortgage lender, with a portfolio of 600 billion baht. The bank managed to achieve higher growth for housing loans in the second quarter after growth in the previous quarter slowed down.
SCB shares closed Friday on the Stock Exchange of Thailand at 137.50 baht, down one baht, in trade worth 1.32 billion baht.