CIMB Thai Bank (CIMBT) has improved its credit scoring and debt collection to strengthen its asset quality control and reduce non-performing loans (NPLs).
Its bad debts significantly rose to 3.3% of outstanding loans last year from 2.5% in 2013, with consumer finance the worst hit. Used car and motorcycle loans under its two affiliates, Center Auto Lease and World Lease, and personal loans were the main areas contributing to higher NPLs.
Customers earning from 10,000 to 15,000 baht per month also struggled with debts in the lacklustre economy.
CIMBT has adjusted approval criteria for loans and will focus on the upper-income market of customers earning a minimum monthly salary of 20,000 baht.
It has increased its debt collection team to control asset quality. With stronger risk management, the bank aims to reduce its NPLs to lower than the 3.4% target this year, said chief executive Subhak Siwaraksa.
CIMBT, 93.71% owned by Malaysia-based CIMB Group, has set a loan growth target of 15-20%, driven by retail banking and small businesses. In 2014, despite a 20%-25% growth target, it achieved only 11% due to economic circumstances.
Its retail loans are expected to rise aggressively by 63.80% to 17.20 billion baht from 10.50 billion last year.
The bank plans to increase its number of individual customers by 200,000 or 22% to 1.1 million accounts.
CIMBT will further focus on investment banking to increase fee-based income. The strategy will also support wholesale deposits and loans.
With its strong Asean network, the bank will provide a full range of financial services to local and regional clients for operations and investment, Mr Subhak said.
CIMBT has several investment banking and capital market deals worth 24 billion baht in the pipeline, with 14 billion from initial public offerings and 10 billion from mergers and acquisitions.
The bank is helping several Laotian customers with finance for projects worth a combined 1.5-2 billion baht.
CIMBT targets ambitious non-interest income growth of 20-30% this year compared with 18.1% last year. It also aims for growth of net interest income of 18-22% from 20.9%.