CIMBT leasing arm studies branching out into fleets, industrial gear
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CENTER AUTO LEASE (CAL), a wholly owned subsidiary of CIMB Thai Bank, plans to penetrate new markets next year to strengthen its loan portfolio in the medium term, its managing director Visit Phuengpornswan says.
The company currently provides loans to individuals who want to buy used vehicles, with such customers making up 80 per cent of its loan portfolio of Bt17.503 billion.
Visit said the company was undertaking a credit-scoring process for leasing of fleet vehicles and industrial equipment and machinery, which is expected |to be complete in January next year.
He said the parent bank wanted CAL to offer these products to |support CIMBT’s commercial clients, many of which have vehicle fleets or are in industrial businesses.
“We also aim to provide instalment loans for big bikes, which we will have to ask the bank to consider. Having various loan products will increase our brand recognition,” he said.
CAL is a small company that has plenty of room to grow, and having a strong relationship with dealers will support its loan growth.
This year, CAL targets new loans of Bt7.5 billion, up from Bt7.33 billion in 2015, Visit said, adding that about 10 per cent of new loans this year would be for truck purchases.
The Asean Economic Community is spurring demand for logistics and investment in border provinces, and many individuals want to own trucks for subcontracting. The company will provide loans for new or used trucks depending on what the customer wants.
Trucks at present account for 7 per cent of the loan portfolio.
CAL will also increase its focus on lending for used passenger cars because the prices of this type of vehicle are becoming more attractive and driving real demand.
Consumers who decide to buy used cars during the economic slowdown show that they actually need such vehicles and are not just being fashionable or motivated by car-dealer promotions, Visit |said.
The proportion of CAL’s lending for used passenger cars this year should reach 40 per cent, up from 30 per cent last year, while the pickup-truck proportion drops to 60 per cent.
“We will try to capture white-collar workers who have [monthly] salaries of more than Bt12,000 and blue-collar workers who earn less than Bt12,000. New credit scoring to classify customers will be finished in July, and this system will help us select the right customers and help us hold down new NPLs,” he said.
Non-performing loans at the end of last year declined to 2.97 per cent of the total from 3.78 per cent in 2014 because the company has prioritised debt collections based on the repayment behaviour of customers.
“The company has to be proactive in debt collection and offer help to customers who we think might not be able to pay their debts on schedule.
“We think the drought will affect our customers because 30 per cent of our loan portfolio is |in the agricultural sector,” he |said.
