CIMB Thai Bank (CIMBT) aims to dramatically boost its pre-provision operating profit (PPOP) to a range of 12-15 billion baht, hoping to meet its goal of upgrading to a mid-tier bank under its mid-term business plan through 2021.
Even though PPOP stood at a mere 2 billion baht last year, the bank's transformation programme and stronger economic growth will be drivers to help meet the target, said president and chief executive Kittiphun Anutarasoti.
CIMBT, a small bank with asset size of 311 billion baht, has implemented a transformation programme since last year and restructured its internal infrastructure base. It wants to improve working efficiency and staff capabilities.
The bank started the Fast Forward programme in the beginning of this year to speed up efficiency improvement.
"With the restructuring programme, we expect our operating profit will be improved significantly around the middle of next year, lifting PPOP to 8-10 billion baht in the next two years," Mr Kittiphun said.
For this year, the bank set a loan growth target of 5%, assuming Thai GDP growth of 4%, he said.
The bank's lending expanded 3.2% last year.
This year's 5% loan growth target includes contributions from all segments including retail, small and medium-sized enterprises (SMEs), and wholesale banking.
Consumer banking, and wealth banking in particular, has outperformed over the past two years.
The bank also offers attractive interest rates for mortgages and personal loans under risk-based pricing to expand the business, Mr Kittiphun said.
CIMBT also plans to keep a lid on non-performing loans (NPLs) at no more than 5% of its loans outstanding, and increase its provisioning coverage ratio to more than 100% by year-end. The bank's NPL ratio stood at 4.8% and its coverage ratio was 93.2% at the end of last year.
CIMBT plans to capitalise on digitisation, which will level the playing field for all banks and facilitate the bank's business expansion in several areas, he said.
Like other banks, CIMBT wants to expand through the banking agent model. It has cooperated with Advanced Info Service Plc (AIS), the country's largest mobile service provider, to offer deposit account service through 60 AIS shops nationwide.
The bank has also joined with 7-Eleven, the country's largest convenience store chain, by opening two mini-branches in the convenience stores, and Spar -- a convenience store located at Bangchak petrol stations -- to operate its third mini-branch.
The focus of the banking agent service will be opening deposit accounts and loan applications. CIMBT plans to maintain its branch size at around 80 across the country.
Mr Kittiphun said the bank plans to grow SME loans significantly this year amid the improving economy, rising asset quality and internal operating process restructuring.
In addition, the government's infrastructure investment plan and the Eastern Economic Corridor is expected to improve the country's private investment and corporate loan demand. Asean business activities should continue to grow, given positive regional gains, supporting wholesale banking, he said.
CIMBT shares closed yesterday on the SET at 1.11, up one satang, in trade worth 951,000 baht.