ICBC Leasing shifting focus towards corporate clients
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ICBC (Thai) Leasing aims to increase its service to enterprises to 20 per cent of its total portfolio by the first quarter of next year, from 15 per cent now, to cash in on the demand for commercial vehicles from subcontractors that plan to join the gover
The slowdown in sales of individual vehicles this year is another factor behind the company’s shift towards corporate customers, said Ong-ard Vorachattarn, president of the company.
He said the company had expected a slowdown in passenger-vehicles sales in the second quarter after the end of the government’s tax-break scheme for first-car buyers.
Indeed, auto sales in April totalled 109,000 units, a significant drop from 150,000 in March, but this was mainly because car buyers did not receive delivery of their vehicles from dealers, a situation that must be closely followed, he said.
However, new borrowing from corporate customers could help offset the slow growth in retail customers, he added.
The company also expects the demand for commercial vehicles from corporate customers will rise thanks to the government’s infrastructure projects, so it is a good time for ICBC (Thai) Leasing to boost business from this kind of customer.
Apart from commercial vehicles, the company aims to be more active in providing financial leases for aircraft after providing Bt2.1 billion to Asia Aviation, the listed owner of low-cost carrier Thai AirAsia, to buy two Airbus A320s.
Ong-ard said new leases in the first four months amounted to Bt11.83 billion, of which 26 per cent was for corporate customers, resulting in the corporate portfolio expanding to 17 per cent from 15 per cent as at the end of last year.
“We expect the proportion to hit 20 per cent by the first quarter of next year, and it could be higher than 20 per cent in the near future. We will review our business plan again if we see high demand from corporate customers,” he said.
The new leases in the first four months, however, have a high chance to beat the target of Bt25 billion for the whole year, so ICBC (Thai) Leasing might raise that figure in the second half, he added.Before Industrial and Commercial Bank of China (Thai) acquired the company, the ratio of corporate to retail customers was 50:50, Ong-ard said.
The company expects outstanding loans this year to reach Bt55 billion, up from Bt44.33 billion last year, and net profit is projected at Bt363 million. The company is confident of meeting the goal after recording net profit of Bt107 million for the first four months.
He said the company would issue short-term debentures next month to sell to institution investors.
