TMB Bank goes after supply-chain

"We will approach the supply chains of larger companies in manufacturing, especially automobiles and appliances, since those segments have longer supply chains than other segments," Paphon Mangkhalathanak, head of the bank’s SME and supply-chain business, said yesterday.

The bank’s portfolio of loans to small and medium-sized enterprises will grow faster than last year, as the emphasis will be on providing financial solutions to companies in the supply chains of large companies, he said.

The recent massive flood showed that TMB Bank’s supply-chain solutions improved the liquidity and cost efficiency of SMEs, while the larger firms were also satisfied with the bank’s services, he said.

The focus will continue to be on how to help supply-chain businesses lower costs and strengthen competitiveness, Paphon said. Customers might not require loans if they can reduce costs, but the strategy will help the bank draw new customers and secure clients for the long haul.

Last year, the bank’s SME portfolio expanded by 26 per cent to Bt100.13 billion, of which Bt7 billion was supply-chain loans.

Only a few banks chase supply-chain business, as it accounts for only Bt50 billion of the Bt1 trillion in SME loans.

TMB Bank can grow from the supply-chain business by joining with larger companies, Paphon said. It projects that its supply-chain loans this year will jump to Bt20 billion.

Supply-chain loans also carry healthy margins similar to small-enterprise loans.

TMB Bank enjoyed a net interest margin of 5.5 per cent last year, while cash-management services for supply chains helped amplify fee income.

Fee income this year is expected to rise to Bt2 billion from Bt1.8 billion last year, he said.