SCB concentrates on 'performing while transforming'

SCB is in the midst of an organisational transition under new two leaders. Arthid Nanthawithaya will be deputy chairman of the executive committee and CEO, while Yol Phokasub will become president. Both currently are senior executive vice presidents of the bank.

Both new positions will be effective in April.

Arthid said that amid economic circumstances that are unlikely to support businesses much, the challenge for the bank was to carry on its growth momentum during the transition.

SCB has the highest market capitalisation in the Thai banking industry and recorded the highest net profits among its peers for many years. Even though the bank last year reported loan growth of just 2.4 per cent, lower than the target of 5-7 per cent, it was able to maintain profitability and net interest margin.

In 2014, SCB recorded net profit of Bt53.3 billion, return on equity was 20.1 per cent and NIM reached 3.26 per cent.

Arthid said the bank would have to keep its core growth engines while putting more emphasis on catering to small and medium-sized enterprises. It should also use new platforms to acquire new customers. In the past, it focused on its existing customers.

Yol added that under the strategy of "performing while transforming", retail and wholesale banking, which represent 44 and 37 per cent of outstanding loans respectively, the bank must sustain its leadership. SCB’s total outstanding loans at the end of 2014 were Bt1.8 trillion.

The SME segment, accounting for 19-20 per cent of the total client base, is an area where SCB might not have put its focus in the past, but now it will strongly go after this sector, especially small enterprises requiring credit lines of Bt10 million to Bt30 million.

"In fact, we have 14 million to 15 million SMEs [in the customer base], but they have used personal loans, so there is a big opportunity for the bank to enhance [the number of] those using [acquiring] commercial loans," Yol said.

SME loan growth is targeted at 10-15 per cent, while that for retail and wholesale banking is 6-8 and 6-7 per cent respectively.

Arthid said the proportion of loans to SMEs would gradually increase and the bank would use its branches to provide financial consulting to these clients, with the goal of becoming the leader in SME lending within three years.

SCB already has outstanding loans of Bt350 billion in the SME segment, but the meaning of "market leader" is becoming the main bank with the highest profit in this sector, Yol said.

He noted for example that SCB had relationships with auto dealers through lending to their customers, but would also have to focus on financing the dealers’ inventories of new cars.

Vichit Suraphongchai, chairman of the executive committee, said SMEs played a meaningful role in the banking industry, while SMEs relied on banks for their strength. Therefore, SCB has a clear policy of supporting this group of clients.