Bangkok Bank sets sights on hire-purchase business
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Bangkok Bank is expected to complete soon its plan to enter the hire-purchase business to fill out its range of retail products.
The country’s largest commercial bank does not have a hire-purchase unit, so it is taking time to study the business carefully because it has two parts – new and used-car loans – Thaweelarp Rittapirom, executive vice president, said last week.
The bank has been interested in the hire-purchase business for a while after it showed gradually increasing growth.
“We cannot say when we will enter the market because we want to ensure the risk management of auto loans. However, we believe that having auto loans can help provide good support for our auto-insurance products through bancassurance,” he said.
Retail banking this year will not be easy due the flood’s impact on consumer sentiment and purchasing power. Consumers are also concentrating on fixing their flooded-damaged residences, he added.
Siri Senajak, head of retail banking at Kiatnakin Bank, said his bank this year would focus more on increasing retail auto loans, as the hire-purchase market is facing serious competition from more players.
Kiatnakin Bank has outstanding auto loans of Bt130 billion, divided evenly between new and used cars. The bank has maintained that ratio especially the used-car loans because there are few players.
The bank’s strategy this year is to increase services and collaborate with auto event organisers to build brand awareness.
Apart from hire purchase, the bank would try to boost more personal and SME loans by penetrating the upcountry market.
“We project total retail banking loans this year will grow by 24 per cent from outstanding loans of Bt180 billion,” he said.
The bank’s deposits this year are expected to rise in line with overall loan growth of 20 per cent.
The expansion of its customer base to the provinces is part of the plan to mobilise deposits and help double the ratio of current accounts to savings accounts this year to 20 per cent.
The bank plans to launch structured products as part of fund-raising to replace bills of exchange (B/E), which will be phased out of the market since B/E sales will have to start contributing fees to the Financial Institutions Development Fund, he added.
