High-yield target to lift KLeasing interest margin
Kasikorn Leasing aims to improve its net interest margin to 1.7 per cent this year from 1.63 per cent in 2014 by focusing on high-yield products - cash for cars and fleet financing.
Surat Leelataviwat, managing director of the subsidiary of Kasikornbank, said yesterday that household debt remained the limiting factor for new-car sales.
KLeasing expects household debt will stay high for one or two more years before returning to normal.
The heavy debt burden carried by consumers including low-income earners has hurt the hire-purchase business and purchasing power will be eroded.
The company will not chase loans that much.
It will focus more on refinancing existing vehicles, lending for new vehicle purchases by fleet operators and financing auto dealerships’ inventories bought from manufacturers.
It is hoped that carmakers will speed up sales this year after experiencing a drop last year.
They will have to expand their dealer networks to increase market share.
This year, KLeasing projects new loans of Bt71 billion, of which Bt40 billion will be for new vehicles, mainly for fleets, and the rest for dealer inventories and refinancing.
The company will try to limit non-performing loans to 1.5 per cent of its portfolio.
Last year, its NPL ratio climbed to 1.16 per cent from 0.86 per cent because of slower growth of outstanding loans, by 0.63 per cent to Bt89.78 billion from Bt89.22 billion. New loans dropped by 18.36 per cent to Bt61.03 billion from Bt74.74 billion.
Its loans should grow only 1-2 per cent this year in line with the market – to Bt89.923 billion from Bt89.78 billion.
KLeasing predicts sales of new cars in the domestic market increasing to 900,000-950,000 this year from 881,000 last year, thanks to public investment and salary adjustments for civil servants.
The inception of the Asean Economic Community will also help support sales of commercial fleet vehicles in border provinces.
KLeasing is seeking opportunities for fleet financing in the Cambodia, Laos, Myanmar and Vietnam via the KBank network, which recently expanded in Laos and is entering Cambodia this year.
It will target Thai companies active in those countries, Surat said.
