KTB's retail banking arm to target clients in the private sector

KRUNGTHAI Bank’s retail banking arm under its new head Tanyapong Thamavaranukup will address its weak areas while capitalising on its strengths to expand the customer base by drawing in clients who work in the private sector.

Tanyapong, first executive vice president for retail banking at KTB, succeeded Weidt Nuchjalearn in the post last October 1, a day after Weidt retired.

Before joining KTB, Tanyapong was the managing director of CFG Services or Ngern Tid Lor (Money on Wheels), a subsidiary of Bank of Ayudhya. He worked at CFG for four years before moving to KTB. 

Tanyapong believes KTB has a lot of opportunity for further grow in retail banking based on two strong points. First of all, KTB is the main bank of civil servants and state-enterprise officers, and second, it has the greatest network in the provinces, holding 25-26 per cent of the upcountry market.

“What KTB must do is draw in more private-sector customers by offering the products they want through our branches nationwide,” he said.

The bank has an individual-customer base of 10 million accounts, 3 million of whom are government officers. But the growth area is in the private sector, so KTB will use its strong network of branches to offer products attractive to officials in private firms, he said.

Under the policy of its president Vorapak Tanyawong, KTB will base its growth on retail and SME (small and medium-sized enterprises) banking in its quest to become a top-tier bank.

Retail lending is targeted to grow by more than 10 per cent this year, and if it has to achieve that objective, the bank needs to bring in more clients from the private sector. Its current loan portfolio for this type of customer is small except for mortgages, a field in which KTB is No 2 player.

As of the end of September, KTB’s outstanding loans in the retail banking segment were Bt627.83 billion, representing 35 per cent of its total loan portfolio of Bt1.8 trillion.

In the mortgage segment, the bank will attempt to increase its market share among the 15 leading property developers. Pricing is not the key here because profit margins in this area are narrow, but the bank will work closely with real-estate salespeople to offer its services to home-buyers.

Tanyapong said that if the bank wants to sustain its growth in retail banking, it should understand the actual requirements of customers and understand its own strong and weak points.

Last September, KTB launched a “Super Easy” personal-loan product with an interest rate of 18 per cent per annum, the lowest in the market, to bring in more private-sector workers. Earlier, it offered a similar product to government employees, “Thanawat Loan”. 

Personal loans account for 16 per cent of KTB’s lending, and housing loans 18 per cent.

Tanyapong said KTB was targeting white-collar customers with monthly incomes of at least Bt18,000. Other personal-loan providers charge 28-per-cent interest and target customers who have monthly incomes of at least Bt10,000.

“We can fill a gap among major banks that are the main players in personal loans. We did not offer this product to all people but we are doing under our capability and the existing lenders cannot do because if they offer the same rate as we did, the existing portfolio will create a trouble to them. But … We can do this [offer low interest rates] because we don’t have a [large] personal-loan portfolio of private-sector clients,” he said.

The bank will gradually introduce more products for private-sector clients, but will not always use a pricing strategy, he said and added that the bank will do in what it suitable for the bank capability.