BAY online auto lending doubles

BAY online auto lending doubles

Pairote: Millennials like digital lending
Pairote: Millennials like digital lending

Krungsri Auto, the auto lending arm of Bank of Ayudhya (BAY), saw its digital loan growth double to 1.2 billion baht this year, indicating that the online channel is gaining ground.

Millennial car buyers were the primary applicants for such lending, said Pairote Cheunkrut, head of Krungsri Auto.

Digital lending should continue to grow next year, based on improving technology and consumers' changing lifestyles, he said.

"Digital auto lending still accounts for a small slice of new car loans, which total 100 billion baht a year, but it is showing positive annual growth," said Mr Pairote.

Krungsri Auto has continued to develop the digital platform to support banking services, with the aim of providing more convenience to customers and improving productivity.

Forming innovative partnerships is another key strategy to support the bank's digital platform, both for financial technology and e-commerce. For instance, Krungsri Auto is offering digital lending services through online marketplace Kaidee.com.

BAY, the country's fifth-largest lender by assets and the second-largest auto lender, has adopted big data analytics to develop its digital lending for other financing needs as well. The technology is intended to aid loan growth and help the bank better control risks.

Mr Pairote said the country's auto industry rebound has boosted BAY's car loan growth this year.

The bank is targeting 150 billion baht in new auto loans to lift its car loan portfolio to 307 billion this year. Non-performing auto loans are at 1.6%, with the bank aiming to cap that ratio at 2%.

Thailand's auto industry has gained traction across the board in 2017, registering growth for the first time in years.

The recovery is supported by improved economic momentum, the launch of new car models and promotional campaigns.

For 2017, the bank expects new car sales to grow by 10% to 850,000 units, new motorcycles to rise by 4% to 1.8 million and used cars to expand by 6% to more than 1.42 million units.

Given the positive growth of the vehicle industry, the bank forecasts the industry's new loans will surge by 8% to 555 billion baht this year.

The prediction is based on the assumption that Thailand's GDP will grow by 4% this year.

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