Kasikornbank (KBank) remains confident in the debt repayment ability of its top 50 corporate clients, despite increased credit risks amid sluggish economic growth.
According to KBank chief executive Kattiya Indaravijaya, the bank has assessed the financial conditions of its top 50 wholesale clients, examining each company's loan portfolio, and found that all of them remain strong. These corporate clients have a solid ability to both repay loans and roll over corporate bonds, she said.
Ms Kattiya insisted that although large corporations are key to the bank's lending growth this year, KBank will continue to be selective in loan approvals. This selective strategy applies across all business segments, including corporate, small and medium-sized enterprises, and retail loans. However, the bank plans to prioritise financing for existing customers over new clients this year.
She noted that loan demand from business operators has also declined, aligning with the current economic and export conditions, while capacity utilisation of business operators has not increased significantly.
In retail banking, the bank is focusing on mortgage loans for homebuyers with a monthly minimum income of 30,000 baht and homes priced at a minimum of 3 million baht per unit.
Recently, KBank expanded its housing loan services to include customers earning less than 30,000 baht and homes priced below 3 million baht, despite the higher credit risk associated with this segment.
Additionally, the bank has discontinued its unsecured personal loans, which led to an increase in bad assets after expanding to underserved customer segments.
This year, the bank is primarily focused on asset quality control rather than loan expansion, resulting in only marginal lending growth, according to Ms Kattiya.
KBank, the country's third-largest lender by total assets, reported a total loan portfolio of around 2.21 trillion baht as of April 2024, down from 2.49 trillion baht during the corresponding period in 2023.
For 2024, the bank targets total loan growth in the range of 3-5% and aims to keep its non-performing loan ratio below 3.25%, as stated in its financial target statement to the Stock Exchange of Thailand.
Ms Kattiya also said that green finance is a key area contributing to the bank's loan growth this year.
KBank aims to offer green financial services worth 200 billion baht by 2030, up from 100 billion baht by the end of this year and about 73 billion baht in 2023.
In a related development, Kasikorn Research Center (K-Research) has trimmed its Thai GDP growth forecast for 2024 to 2.6%, from 2.8% in earlier projections, citing slower growth prospects for the country's exports and the manufacturing sector.