KTB outlines aims for second phase of business plan
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TO COMPLY with Krungthai Bank's "Summit II" business plan for 2016-18 aimed at closing the gap with its rivals, the bank's retail and SME businesses are focusing on wealth management, risk management and medium-sized enterprises in relation to upcoming go
KTB’s seven-year business plan consists of three phases: the First Summit that covered 2014 to 2015; Summit II that runs from next year to 2018; and Summit III, which will end in 2021.
Retail business and small and medium-sized enterprises are the |key focuses of the bank’s Summit |II under the policy of KTB pre-|sident Vorapak Tanyawong.
Tanyapong Thamavaranukupt, head of retail banking, acknowledged that the current economic circumstances did not support growth in retail banking, obliging his department to shift its focus to managing bad debt.
Most clients in retail banking are self-employed people and retail SMEs that have been affected by the econom
ic slowdown. When their incomes decline, their repayment ability is reduced as well. Therefore, the bank has to monitor non-performing personal and housing loans closely.
Even though the rate of bad loans is rising more slowly than before, the bank will remain focused on asset-quality management in 2016, causing its loan-growth target for next year to be set at 4-5 per cent compared with 7-8 per cent this year.
Tanyapong said that under Summit II, the retail banking division had set two initiatives. The first is to improve the ranking of wealth management and the second is to reinforce digital banking.
Though KTB is the country’s largest bank, it lags behind other banks in wealth management, ranking fourth.
“We have established relationship managers at wealth hubs in our 84 area offices to [offer] products to meet the requirements of wealthy customers,” he said.
KTB recently launched a new model of lounges. Tanyapong said rich customers expected exclusive services beyond the financial realm from KTB like many other banks offered.
As for digital banking, he said people would move towards do-it-yourself banking apart from Internet and mobile banking.
The so-called M generation, those born from 2000 onwards, like searching for banking services themselves and making their own decisions on which services to use. When the bank understands the character of this kind of people, bank staff should not push products on them at the branches or over the phone, he said.
To cater to this trend, the bank will not add more branches and staff next year and will give importance to self-handled financial services.
Udomsak Rojviboonchai, head of KTB’s business centre group, said medium-sized enterprises, which the bank defines as businesses with annual turnover of Bt100 million to Bt500 million with credit lines of Bt20 million to Bt100 million, would be the focus for KTB from next year onwards.
It will take advantage of the government’s soft loan programme to cater to these enterprises and speed up the credit-approval process.
In 2016, the bank targets SME loan growth of 9 per cent, of which 25 per cent will be accounted for by medium-sized enterprises, he said.
The lower rate of non-performing loans can provide room for KTB to accelerate loan growth in the medium-sized segment, while the bank will focus on businesses related to government spending and the Asean Economic Community.
Construction, logistics, alternative energy, food and private hospitals are key focuses for KTB, he said.
Udomsak said the bank’s outstanding loans to SMEs next year would be close to Bt500 billion, up from Bt417 billion currently.
