Siam Commercial Bank (SCB) is prepared to further expand and digitise businesses in a bid to enhance profitability and return on equity (ROE).
Given a strong capital base, the bank will mainly concentrate on improving its businesses to strengthen growth potential and simultaneously lower the cost-to-income ratio, said Arthid Nanthawithaya, SCB's chief executive.
For instance, the bank plans to scale up Robinhood to extend beyond food delivery, potentially developing it into an e-commerce platform.
The bank also plans to launch a new phase of SCB Transaction, a digital infrastructure development project, but the project will be renamed.
Under the vision, SCB needs to revamp overall business operations and digitise the existing traditional banking businesses, said Mr Arthid. At the same time, the bank plans to explore financial service opportunities of the new S-curve industries to support higher profits and ROE.
"We cannot do business the same way when we target improving profitability and ROE. An overall business revamp is needed," Mr Arthid said.
Established in 1907, SCB is considered the first Thai bank, with His Majesty King Maha Vajiralongkorn owning the largest share at 23.4%.
Recently, SCB informed the Stock Exchange of Thailand of its 2021 financial target, setting a loan growth ratio of 3-5%, 3-3.2% for net interest income and flat growth for non-interest income.
The bank expects the cost-to-income ratio to arrive at 40% this year. Gross non-performing loans (NPLs) are expected at 4-4.5% of total outstanding loans in 2021 and the loan coverage ratio of 130% at a minimum.
Even though it will take more time for the economy to recover, sentiment factors have shown improvement, said Mr Arthid.
Some SCB customers still need financial assistance and the bank is ready to offer several financial solutions on a case-by-case basis, he said.
SCB reported a net profit of 27.2 billion baht in 2020, down 32.7% year-on-year, after setting aside expected credit losses (a buffer against bad debts) of 46.6 billion.
SCB's gross NPL ratio rose to 3.7% at year-end 2020 from 3.4% in 2019, while the bank's NPL coverage ratio also increased to 141%, with a strong CAR ratio at 28.2%.
The majority of customers, both individuals and businesses that applied for the debt relief measures, have managed to exit the financial assistance programme. With this scenario, the bank is ready to move forward with its business expansion this year, said Mr Arthid.
SCB aims to book new SME loans worth 40 billion baht this year. The bank's total outstanding SME loans are registered around 260 billion baht baht, of which 160 billion were under the debt relief measures. Around 60 billion baht worth of outstanding SME loans remain under the bank's financial assistance programme.
SCB, in collaboration with SET-listed property developer Sansiri, are targeting SMEs that are Sansiri customers and trading partners, through the Sansiri x SCB: Build for All campaign.
Sansiri set a campaign budget of 6 billion baht, targeting to help 1,500 customers through both the offline and online platforms, while SCB offers special SME loan packages to Sansiri clients with a total credit line worth 1 billion baht.