Tisco says lending may rise 20% this year

Tisco Bank’s loan growth is expected to exceed the target of 15 per cent this year, and could grow by an additional 3-5 percentage points, group chief executive Oranuch Apisaksirikul said yesterday.
“We expect economic growth to continue in the second half of the year, driven by private investment and consumption as well as a tax cut,” she said.
Tisco Financial Group’s profits rose 6.6 per cent year on year to Bt919.76 million in the second quarter. This was also 9.9 per cent higher than earnings in the previous three months.
An increase in lending contributed to the profit rise, Oranuch added.
Although Tisco Bank now has to contribute 0.47 per cent of its deposit base to help pay off the accumulated debt of the Financial Institutions Development Fund, the cost is not high as it is offset by a tax cut, the CEO said.
Net interest income in the second quarter was Bt1.73 billion, up 10.4 per cent from the first three months but 7.8 per cent lower year on year.
Non-interest receipts were Bt1.22 billion, up 20 per cent from the previous quarter and 35.8 per cent higher year on year.
Looking ahead, the bank will try to concentrate on the domestic market, as Asean will become a single market at the beginning of 2015, which means more investment is expected to flow into this country, Oranuch said.
There is room to expand Tisco Bank’s core business of retail banking, as many people still borrow money from loan sharks, she said. Retail lending was worth Bt148.19 billion in the second quarter, accounting for 72.3 per cent of the bank’s lending portfolio.
Suthas Ruangmanamongkol, president of Tisco Bank, said its lending had grown 13.5 per cent year to date from the end of 2011.
Rising auto-loan activity contributed to the increase, and overall vehicle sales are expected to be as high as 1 million to 1.2 million units this year, he said. Tisco’s auto high-purchase loans have expanded 10.2 per cent from the end of last year.
Business loans have grown 21.51 per cent on rising lending to the utility and services sectors, while lending to small and medium-sized enterprises has grown at a high rate of 35 per cent since the end of last year, Suthas added.
As of the end of June, overall Tisco Bank outstanding lending was Bt209.97 billion, 7.9 per cent up from the end of the first quarter. Of this amount, auto instalment loans grew 5.6 per cent to Bt137.61 billion.
Loans to businesses rose 12.7 per cent from the first quarter to Bt4.4 billion, and lending to SMEs rose by 23.6 per cent to Bt3.51 billion.
Total deposits rose 1.3 per cent from the first quarter, to Bt174.69 billion. The bank’s funding costs this year will not be as high as previously, because of the drop in oil prices and the central bank maintaining the policy rate at a low level because of the easing of inflationary pressure, the president said.
The Bank of Thailand is expected to keep the policy rate unchanged for the foreseeable future because of the ongoing economic crisis in Europe, he added.
Chatri Chandrangam, chief financial officer of the group, said Tisco Financial Group’s profit in the first six months had risen 3.8 per cent year on year to Bt1.76 billion.
For the asset-management side of the business, assets under management grew 5 per cent from the end of the first quarter to Bt151.72 billion at the end of June, largely on expansion of mutual-fund business.
Fees received from asset management grew 3.51 per cent quarter on quarter to Bt167.28 million. Brokerage business also contributed, with fees rising 10.4 per cent from the first quarter to Bt172 million, Chatri said.