Krungsri eases car loan debt

Krungsri eases car loan debt

Krungsri Auto, a car loan unit under Bank of Ayudhya, has helped many customers exit debt relief measures, with those remaining in the programme tallied at 5.5% of total customers.

Some 650,000 auto loan clients applied for debt relief measures under the Bank of Thailand's first-phase debt relief scheme, which commenced in March.

Under the financial assistance measures covering suspension of both principal and interest payment, along with a 30% reduction in monthly instalment payments, they eased the financial burdens of borrowers.

Some clients who could not repay debts normally remain in the debt relief scheme for the second phase, said Kittiya Srisanit, head of Krungsri Auto Group.

Clients' debt-servicing ability has continued to improve because of the government's easing of the lockdown, allowing businesses to resume operation.

The portion of clients remaining in the debt relief programme is 5.5% of total customers, said Mrs Kittiya.

The second phase is due to expire at the end of this year, per the central bank's regulation. If clients cannot repay their debts after the programme expires, Krungsri Auto can continue providing financial aid to customers on a case-by-case basis, she said.

"We expect borrowers who are in the scheme to work to exit it in accordance with the gradual economic recovery. We also expect auto loan growth to slightly pick up in this quarter from the third quarter," said Mrs Kittiya.

Krungsri Auto will continue monitoring clients in the debt relief programme before determining the number of those exiting at year-end.

Despite being affected by the pandemic, the company maintained its 2020 business target with a 7% growth projection for auto loans, and non-performing loans making up no more than 2% of the total.

The bank is not concerned about new players in the car title loan segment as it will provide more alternatives for car buyers, she said.

Krungsri Auto does not plan to adopt a pricing strategy, instead focusing on service quality and the digital platform to respond to customers' needs, Mrs Kittiya said.

Krungsri Auto logged the value of new loans at 263 billion baht, down 18% year-on-year in the first half. Total outstanding loans were 429 billion baht, up 13% year-on-year.

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