KBank still sure of loan growth target

Although Kasikorn Research Centre tempered its forecast for this year’s growth of gross domestic product to 4 per cent from 4.8 per cent, Kasikornbank’s retail banking business is still on target. 

“We do believe our loan expansion this year will achieve 10-13 per cent [to Bt306.60 billion] with lower non-performing loans, since we are dealing with customers earning a monthly income of Bt15,000 and above,” Pakorn Partanapat, an executive vice president, said yesterday.

KBank is among the major players in retail banking.

Its loan growth continued in the first half despite the sluggishness in consumption. 

Personal loans at KBank surged 11 per cent from the end of last year, while housing loans were up 3 per cent and credit-card loans 2 per cent.

KBank is aiming for deposit and mutual-fund growth of 11-14 per cent. Deposits alone are expected to jump by 10 per cent in line with loan growth.

Deposit mobilisation should be matched up with loan growth because the bank wants to maintain its loan-to-deposit ratio at 95 per cent. Kosit Panpiemras, executive chairman of Bangkok Bank, referring to the liquidity outlook, said the bank believed that sufficient deposits should be prepared before liquidity is squeezed.

BBL has closely monitored liquidity for a long time, since its loan-to-deposit ratio is 90 per cent, the lowest in the banking industry.

BBL stresses deposits. Its loan portfolio will not increase that much faster than GDP.

The country’s savings ratio showed a decline from 9.6 per cent in 2010 to 9.2 per cent in 2011. Savings could cushion Thais from economic uncertainty.

Pakorn said the profitability of retail banking was not based solely on loan growth. KBank has also attempted to boost fee income.

Fee income in the first six months soared 32 per cent to Bt11.5 billion against loan growth of 4 per cent. For the full year, the bank is counting on its fee income to surge 26-29 per cent to Bt23.23 billion.

Part of KBank’s strategy to boost fee income is the expansion of digital banking.

 It will spend more than Bt200 million to adapt its branches to the digital trend. 

At least 10 branches will be given a new look this year and 100 more branches next year.