New KBank VP enbraces loans to SMEs
Patchara Samalapa sees his new job as head of SME banking at Kasikornbank as a big challenge and a new dimension to his career.
The former managing director of Kasikorn Asset Management had worked in the capital market before shifting to banking in 1995. He became an executive vice president at KBank on New Year’s Day.
Patchara told a news conference yesterday on his mission that he needed to adjust to a larger organisation and change his focus from products to network services.
“At an asset-management company, core income is from fees, while in banking, we have to balance loans and risk,” he said.
Heading up SME banking is a job with value and challenges because small and medium-sized enterprises form a major part of the economy’s foundation, he said.
The country needs to grow through domestic consumption rather than exports, so lending to SMEs is a worthy cause.
DIFFICULTY
However, the problem for SMEs is the difficulty in accessing financial resources. They have to have collateral or guarantees to obtain loans.
This limits their growth. Meanwhile, banks operate under a risk framework and want to expand in terms of loans, so this job is very challenging for him.
Competition in SME banking this year will remain intense because the spread for this segment will be healthier than others, while the number of new customers will not likely increase, he said.
It is not easy to find new SMEs with annual sales of Bt400 million, Patchara noted.
The market is expected to grow in line with the gross domestic product, so banks have to gain market share if they want to expand faster than that. The market will gravitate towards refinancing rather than new loans.
KBank, as the leader in SME banking, will not focus on refinance loans but will rely on its strong valuation and network to beat rivals, he said.
Its market share is projected to increase to 31 per cent this year from 30 pert cent. Its outstanding loans are expected to rise by 12 per cent to Bt480 billion from Bt428 billion last year and revenue to increase to Bt30.73 billion from Bt27.70 billion.
Sixty per cent of its lending growth will come from additional credit for existing loans, 20 per cent from new loans and 20 per cent from refinancing, he said.
