Unsecured loans unlikely to spike next year, CIMBT says
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DESPITE SOME signs of improvements in the economy next year, CIMB Thai Bank does not expect a sharp rebound in demand for unsecured loans, as people remain cautious on spending, a top official has said.
Senior executive vice president Adisorn Sermchaiwong said the bank also wants to improve its collection process, he said. The rate of non-performing unsecured loans is 3-4 per cent, compared with just 1 per cent for housing loans.
Most bad unsecured loans are held by clients who borrowed in 2013. Therefore, the bank should ensure an efficient collection process, while loan growth in retail banking in 2016 will still rely on housing loans. Still, given the good sentiment for the domestic economy, CIMBT hopes to book new loans next year worth Bt23 billion to Bt24 billion, similar to 2014.
About Bt16 billion to Bt17 billion of next year’s new-loan target will be housing loans and the rest unsecured loans.
This year, new lending in retail banking is expected to reach Bt20 billion, held back by the sluggish economy. Adisorn said the bank also aimed to improve the market share of its investment products to retail clients to 7.54 per cent by 2018 from 3.26 per cent currently.
“We expect demand for structured debentures to grow a lot over the next few years because the returns from this type of instrument will rely on stocks and interest,” he said.
To expand market share, the bank has to expand its customer base from 50,000 to 100,000 within three years and it has to encourage customers to put their money in non-deposit products. Before 2013, wealthy customers accounted for 88 per cent of deposits to CIMBT, but that proportion has dropped to 56 per cent as clients in this category have shifted to other investments.
CIMBT has total assets under management of Bt160 billion, up from Bt66.4 billion before 2013.
Adisorn said one channel through which the bank could expand its customer base was “Beat Banking”: It has collaborated with Advanced Info Service to transform mobile phones into a digital bank for daily use.
AIS subscribers can use Beat Banking to make payments and transfer and withdraw money.
The central bank recently allowed CIMBT to open deposit accounts via AIS shops.
