Bank woo SME clients with good ratings
As banks focus on lending to small and medium-sized enterprises next year, they expect to face tough competition because there are few potential customers with good credit ratings. Each bank is looking for SMEs that have opportunities to grow and suffer
The competition to find good customers next year will be more tense because each bank has to expand loans to existing customers while refinancing customers shifting from rivals. However, pricing is not a key strategy because banks have to base interest rates on the actual situation.
TBank is among several banks closely monitoring how their SME customers are affected by the global economy.
The bank has segmented these customers according to industry and charges high interest to those on its watch list of high-risk businesses.
“We have also increased the |frequency of our visits to clients, especially existing customers,” he said.
TBank has increased special conditions for SME customers in this quarter to ensure they do not hurt the bank’s performance.
Jiratchayuth said the new conditions included shareholder equity, which must be sufficient for when SMEs suffer a drop in revenue.
Krungthai Bank has increased |the frequency of its visits to customers in the past three months as it predicted that the euro-zone debt crisis would hurt SME clients in the fourth quarter, said Weidt Nuchjalearn, senior executive vice president.
He said SMEs were less able to tackle such external problems compared with larger companies, so the bank must quickly help its clients by increasing the frequency of visits and looking after the cash flow of customers.
Moreover, KTB has segmented watch-list clients, both existing and potential, because the risk in each sector is different.
SMEs dealing in rubber, furniture and garments are regarded as watch-list clients because those industries are affected by the global economy. The bank will visit those companies more than twice a month, up from once per month.
Yet the bank has no plan to reduce credit lines or increase interest rates for watch-list customers because tighter conditions would increase their burden, he added.
