ICBC (Thai) Leasing eyes Asean hub status
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Industrial and Commercial Bank of China aims to make ICBC (Thai) Leasing the centre of a hire-purchase and machinery leasing network in Asean by transferring a core banking information-technology system and allowing the company to offer regional leasing f
ICBC (Thai) Leasing, a subsidiary of ICBC (Thai), is the banking giant’s only hire-purchase operation outside China.
The group is setting up a core IT system, called FOVA, for ICBC (Thai) Leasing to become the centre of a leasing network and serve Asean expansion, Ong-ard Vorachattarn, president of ICBC (Thai) Leasing, said yesterday.
ICBC Leasing Group in China has assets of Bt400 billion and experience in machinery and aircraft leasing, but is not familiar with instalment financing for retail customers.
He said ICBC Leasing Group plans to increase ICBC (Thai) Leasing’s registered capital from Bt4 billion to support the planned leasing service for larger machines and the aviation and marine segments.
A major reason behind the group seeing the Thai unit at the centre of an Asean leasing network is its financial status since 2008. ICBC (Thai) Leasing’s assets at the end of October were Bt31.4 billion, against Bt7.64 billion in 2008.
Over the same period, outstanding loans rose to Bt31.21 billion from Bt7.62 billion, revenue soared to Bt1.8 billion from Bt454 million and net profit grew to Bt195 million from Bt28 million.
“We are confident net profit this year will end up at Bt200 million, and outstanding loans will be Bt32 billion,” Ong-ard said.
The company president said the group had decided that if ICBC (Thai) Leasing’s provision of a full range of leasing services proved a successful business model in Thailand, it would be expanded further into Asean.
“Next year we will study the possibility of leasing for larger machinery, before going into aviation and marine leasing,” he added.
Chinese clients
Chinese companies with plants in the Kingdom are the main potential clients for larger-machinery leasing.
ICBC Leasing Group in China is also interested in providing hire purchase for retail customers in Thailand to use in China, he said.
At present, auto hire purchase for retail clients accounts for 80 per cent of ICBC (Thai) Leasing’s overall portfolio, with the remaining 20 per cent for larger-machinery leasing for bigger companies.
The company expects to gradually adjust the ratio next year to 70:30, he added.
In its 2012 business plan, ICBC (Thai) Leasing targets new lending of Bt21 billion, of which 30 per cent will come from larger-sized machinery leasing.
Ong-ard said the company plans to grow by 10 per cent in terms of new loans and 35 per cent in assets next year.
As a result, its new lending will be Bt21 billion, against an expected Bt19 billion this year, and assets will be Bt44 billion, against this year’s expected Bt32 billion.
He said the yield for larger machinery, including aviation and marine business, is better than that for smaller machinery and autos.
Used-car loans account for 60 per cent of total auto lending, and the company prefers the ratio of used to new cars to remain 60:40 because of the healthy yield from the former.
The business plan for auto hire purchase next year is focused on the provincial market, and the company will set up a southern hub in Surat Thani province.
It has eight hubs covering 47 provinces nationwide.
