CIMB Thai Bank (CIMBT) expects new retail lending to shrink by 20-25% this year in light of the coronavirus crisis but is maintaining its projection of loan delinquency in the retail segment, citing debt relief measures and risk management.
New bookings of retail loans in the banking sector are expected to contract in a range of 20-25% this year, with CIMBT enduring a similar fate.
But the bank expects to maintain outstanding retail loans at the existing amount of 145 billion baht by year-end, equivalent to a flat growth rate, said Tan Keat Jin, senior executive vice-president and deputy head of consumer banking.
Non-performing loans (NPLs) in the retail segment account for 3.6% of CIMBT's total retail loan portfolio.
The bank will try to maintain the bad-debt ratio at the existing level by the end of this year through debt relief measures and prudent risk management.
Individual customers applying for a debt payment holiday under the Bank of Thailand's first phase of debt relief measures represent 35% of CIMBT's total loan accounts and 40% of the total loan portfolio.
"However, most of them do not need to continue the second-phase debt payment holiday," Mr Tan said. "At the same time, they have entered debt rescheduling, replacing the suspension of both principal and interest payment, which lowers the proportion to 20% of total accounts."
This reflects improving signs in line with the government's easing of lockdown measures, he said.
Mr Tan said the bank plans to launch digital lending in the second half, covering personal loan and car title loan products.
For digital personal loans, the bank targets customers whose monthly income is 20,000-30,000 baht.
The bank plans to offer a small-ticket credit line of up to 20,000 baht, with the longest loan period of 12 months. Interest is expected to be in a range of 13-15%.
The bank has partnered with 9F, a Chinese financial technology firm, and Neo Money to expand digital banking services.
CIMBT, the consumer banking arm in Thailand of Malaysia's CIMB Group Holdings Berhad, is also promoting a digital savings programme called Chill D. The scheme targets 500,000 new e-deposit accounts, with a total deposit amount of 1.5 billion baht this year.
The Bank of Thailand is expected to let financial institutions test their electronic Know Your Customer via National Digital ID and exit from the central bank's regulatory sandbox next month. This would enable digital deposit expansion.
Under its digital strategy, CIMBT has continued to close brick-and-mortar branches in line with the changing behaviour of consumers.
The coronavirus outbreak has sped up digital banking growth, and CIMBT expects to keep physical branches at a suitable number of 50-60 locations, Mr Tan said.