KTB plans to open 100 new branches in 2012

Krung Thai Bank plans to enhance the role of its branch network to build up its retail business more aggressively.
Weidt Nuchjalearn, KTB’s senior executive vice president for the retail business and network, said last week that the state-run bank would add 100 branches this year to its 1,000-branch network. Most of the new branches will be located in Bangkok because the bank has not captured this market yet. KTB is the leader in the provincial market, he said.
This year, KTB will use its branch network in Bangkok to drive growth of home loans and the upcountry network to drive hire-purchase loans, “Krung Thai Thanawat” personal loans and micro-loans.
The bank aims to open 200,000 accounts this year and most must be active in order to benefit from the cross-selling of products.
KTB has tested the branch network to convince vendors who have never opened an account with a bank before to open accounts at KTB in order to expand micro-loans.
“Customers do not have to use loans. We just want them to use financial transactions such as deposits and withdrawals to learn the behaviour of customers. From their transactions it is easy to develop financial programmes to serve them,” he said.
KTB is the first bank to develop a micro-finance programme by arranging for its branches and market owners to cooperate in granting loans to small vendors who have no bank accounts. The maximum loan is Bt200,000 and the interest rate is lower than what they would have to pay to loan sharks. The bank targets a whopping Bt2 billion in micro-loans in 2012 compared to only Bt40 million in 2011.
The bank has also adjusted its branch model to become a hire-purchase branch of KTB Leasing, a subsidiary.
“We saw that KTB Leasing had few branches while we want to expand hire-purchase loans, so KTB branches should help strengthen their staff to approve hire purchases by themselves and refer customers to KTB Leasing,” he said.
KTB branches can now approve hire-purchase loans for appliances and motorcycles while referring customers who want an auto loan to KTB Leasing. The bank expects to provide Bt2 billion in hire-purchase loans.
KTB would also focus more on supplier financing for the auto, food and construction industries because they are the main ones to benefit from post-flood rehabilitation.
Since retail loans carry wider spreads than other types, several banks aim to cash in on this segment, but the strong branch network and IT system could help KTB achieve its goal, he added.
KTB targets to extend Bt60 billion in new loans this year, with half of them mortgage loans. Its outstanding loans are currently at Bt400 billion.