Floods will hit auto loans: Tisco

Hire-purchase lending accounts for 74.6 per cent of the company’s retail loans. Its auto loans in the third quarter grew by 4.1 per cent to Bt123.86 billion from the previous three months.
Tisco chief executive officer Oranuch Apisaksirikul yesterday said the group was not confident that new auto loans from the motor show in December could offset the drop in new lending this month and next.
In general, the fourth quarter is the peak season for auto sales and hire purchase. Tisco believes vehicle sales this year will now total 900,000 units, against the previously expected 950,000.
“New auto lending witnessed a drop in September and this should continue in October and November, so our auto-loan portfolio in the fourth quarter might not expand,” she said.
Even though Tisco has no corporate clients in industrial parks, some workers of the companies located in the estates are hire-purchase customers.
About 4 per cent of the company’s auto-lending portfolio is in three flood-affected provinces, she said.
For seriously affected customers, Tisco will offer a debt restructuring by extending the maximum repayment to 12 months from the current six months, she said.
Oranuch said some 400 of the company’s 400,000 hire-purchase customers had already asked for debt restructuring.
The business plan for the fourth quarter will not be reviewed, she said, due to loans in the first nine months having grown by 21.4 per cent to Bt181.74 billion year on year, higher than the projection of 20 per cent for the whole year.
However, Tisco will focus on efficiency management, she added.
Tisco reported a net profit of Bt899 million for the third quarter, up by 23 per cent year on year and 4.1 per cent quarter on quarter. In the first nine months, net earnings came in at Bt2.6 billion.
The CEO said net profit in the current quarter would not be lower than that achieved in the third quarter, even though auto lending would fall. This is because the group has
good income from fee-based and securities business.
The slowdown in the economy this quarter as a result of the floods will, however, mean it is likely the Bank of Thailand repurchase rate will be maintained, which will ease the fierce competition for deposits, Oranuch said.
Tisco does not expect the aftermath of the flooding will affect economic growth next year, and believes it will in fact drive loan growth because corporate and retail customers will need loans to repair manufacturing plants and homes.
Meanwhile, government measures such as corporate-tax reduction, the first-car purchase scheme and the first-home buyer project will accelerate the economy next year, she said.