KLeasing aims to cash in on market for big-bike loans
Kasikorn Leasing added Bt55.73 billion in loans in the first nine months and will turn its focus to "big bikes" for the rest of this year.
The market for large-displacement motorcycles is expected to jump by 45 per cent to 70,000 units this year, while automobile financing will be sluggish this year and may not turn around until the second half of next year.
Managing director Akaranant Thitasirivit said yesterday that based on results so far, the new-loan target for the entire year was Bt96.79 billion.
KLeasing’s non-performing-loan ratio is 0.83 per cent. After taking a special provision for the economic volatility that may weigh on its customers, the company saw net profits for the first nine months reach Bt115 million.
This quarter, the auto market will continue to lose speed because of the lingering dampening effect of the first-car-buyer programme and falling used-car prices.
Kasikorn Research Centre has found that big bikes will continue to be a fast-growing market. Some foreign automakers have already established factories for these larger two-wheelers in Thailand, in advance of the Asean Economic Community’s fruition in 2015.
Big-bike prices are lower, while the customer base is expanding. Buyers are high-income earners who are fond of travelling.
Executive chairman Isara Wongrung said that according to KResearch, the auto financing market would continue to lose steam through the first half of next year. Sales campaigns with zero interest rates and small down payments, to be launched by car dealers this quarter, will help stimulate the market and maintain overall sales.
However, lenders may have to be very careful with their credit analysis to mitigate risks amid the economic slowdown and rising household debt. Overall instalment loans are likely to increase by 18 per cent this year against 34 per cent last year.
Although the Bank of Thailand’s policy rate remains stable at 2.5 per cent, liquidity is likely to tighten towards the end of the year. Financial institutions are expected to attract customers with high returns for special fixed-term deposits to serve high loan demand and build reserves for possible financial volatility.
It is virtually impossible to see a drop in interest rates for instalment loans this year, as they are already the lowest of all types of lending rates, with very thin margins, mainly because of the intense competition in the auto financing market over the past five years.
