TMB targets sharp growth in retail loans

Chief Executive Officer Boontuck Wungcharoen said yesterday that the bank’s NIM improved to nearly 3 per cent from 2 per cent as it focused on high yield loans. However, because of the ongoing loan ratio adjustment, loans in the first half grew only 2 per cent.
In the next 2-3 years, corporate loans will account for 40 per cent of total loans, down from 45 per cent, small and medium-sized loan will be 30 per cent and retail loans will rise to 30 per cent from 22 per cent.
The bank hopes its NIM will reach 3 per cent by the end of this year, he said, and added that the loan proportion adjustment will help sustain the NIM.
The adjustment of loan proportion is part of the bank’s risk management amid the global economic volatility, he said.
The bank this year has targeted loan growth of more than 10 per cent, which, Boontuck said the bank is optimistic of achieving following deals in the pipeline, and optimism about small businesses who are the targeted customers.
“The [global] economic slowdown, including in China, which is a key trading partner of Thailand, has impacted our economy and banking industry. However, we still believe we can grow through small and medium businesses as a lot of enterprises do not have access to funds,” he said.
TMB Bank has built a strong retail customer base through its transactional banking and designed special transactional products such as No Fee Deposit Account, No Limit Debit Card and Free Flow Deposit Account.
However, TMB’s interest rate of 0.125 per cent per annum is lower than the 0.75 per cent in the banking industry because the bank believes savings customers prefer convenience for their transactions rather than returns through interest, he added.
The benefit enhancement offered to customers not only reinforces our market leadership but also helps customers to save cost from inter-region fund transfer, said the CEO.
Kanchana Rojvatunyu, executive vice president and head of retail marketing group, said that after launching the special transactional products in the past three years, the number of active customers had increased to 2.3 million from less than 1 million.
About 70 per cent of new retail customers came from the special transactional products.
The bank defines an active customer as one who has a deposit balance of Bt10,000 per month and a transaction volume of at least one time per month.
Yesterday, TMB announced waiver of inter-region fund transfer fees including deposits, withdrawals, cash and cheque transfers between TMB accounts across all regions nationwide, via all banking service channels.
Boontuck said the bank will lose fee income of Bt100 million per year from the waiver, but the bank hopes the addition of new customers and the active customers as well as cross-selling products will offset the fee loss.