Krungsri aims to double mobile-app users in major digital push
Bank of Ayudhya Plc (Krungsri) has allocated an investment budget of Bt7.5 billion to Bt8.4 billion to upgrade its digital platforms this year while it aims for 6 to 8 per cent loan growth year on year, the bank’s president and chief executive officer, Noriaki Goto, said.
The investments are aimed at providing a holistic end-to-end mobile banking experience and becoming the number one bank in the country for retail banking services, Goto said.
“To enhance customer experience and increase customer engagement, we will continue to improve our various digital services such as digital lending, QR code payments and AI chatbots,” he said.
“Our target for Krungsri Mobile Application (KMA) users for 2019 is 5 million, doubling from 2.5 million in 2018. We aim to bring a majority of KMA customers onboard with our digital lending service,” he stated.
Krungsri’s target net interest margin (NIM) for 2019 stands at between 3.4 to 3.6 per cent.
Meanwhile, the bank’s non-interest income is expected to increase by around 3.5 per cent this year, compared to the year-on-year 7.5-per-cent growth seen in 2018. This is due to the slower economic growth expected in 2019.
Krungsri forecasts that the Kingdom’s gross domestic product will grow 4.1 per cent in 2019 compared to last year’s 4.3 per cent, according to the bank’s CEO.
The bank’s non-performing loans (NPLs) are expected to be maintained at lower than 2.5 per cent in 2019.
Krungsri expects the Bank of Thailand (BOT) to hike the policy rate once in mid-2019, increasing the interest rate from 1.75 to 2 per cent.
Goto cautioned that the BOT’s new macro-prudential guidelines would negatively impact Krungsri’s mortgage loans.
“A 10-per-cent decrease in mortgage loans is expected due to the impact of the BOT’s new macro-prudential guidelines, which will become active in April this year,” he said.
Under the new rules, the maximum loan-to-value (LTV) ratio will be restricted to 80 per cent on new mortgages for homes worth more than Bt10 million. The same LTV restrictions will apply for the purchase of a second home, irrespective of the property value. Banks also will be prohibited from providing advances that exceed the value of a property.
“In our investment banking services, we will focus our investment portfolios on sustainability to cope with the less-certain market conditions in 2019,” he said, citing the ongoing US-China trade war and prospects of rising interest rates as key risk factors.
