KLeasing Q1 net profit grows 68% amid hope
KASIKORN LEASING has reported new lending in the first quarter of Bt20.83 billion, while posting net profit of Bt165 million, an increase of 68.84 per cent.
Thawee Teerasoontornwong, KLeasing executive chairman, said new loans were up 37.38 per cent from the first quarter last year. |Of the total, hire-purchase and financial leases amounted to Bt8.04 billion, up 4.52 per cent year on |year, while the remaining Bt12.79 billion was granted under auto-dealer floor plans, an increase of 71.18 per cent.
The company’s outstanding balance totalled Bt88.19 billion at the end of the first quarter, down 1.52 per cent year on year, in line with the automotive market’s sluggish sales, while non-performing loans stood at 1.53 per cent.
The auto industry encountered |a number of risk factors during |the quarter, including the persis-|tent drought, weakening prices |of agricultural products, high ac-cumulated household debt, frail exports due to trade partners’ economic uncertainties, prudent |auto financing, and slower car sales due to increased prices stemming from higher excise tax rates. Therefore, the auto-financing market has suffered an ongoing slowdown.
Turnaround foreseen
However, KLeasing believes prospects are brighter for the second half of the year when the market should grow by 0-2 per cent, under the assumption of an economic turnaround driven by the government’s economic stimulus packages and infrastructure investments.
Kasikorn Research Centre projects that this year’s domestic car sales are likely to contract by 5-10 per cent to about 720,000-760,000 units. However, small sport-utility vehicles, eco-cars and 1-tonne pickup trucks will enjoy a better outlook than other segments.
The small-SUV segment will be driven by demand in Bangkok and its vicinity, as well as other major cities, where residents prefer multipurpose vehicles, while eco-cars will attract buyers through their unchanged or even lower prices in some models under the Eco-car Phase 2 scheme.
The pickup-truck segment will be stimulated by rising private and public investment, plus overall stable prices.
The market for motorcycles with engine capacities of 126cc or higher will grow by around 35 per cent to at least 222,000 new units, an ongoing expansion from last year’s 40-per-cent growth.
Thawee said that despite the current slower growth of household debt at 5.2 per cent per annum, compared with 13.5 per cent five years ago, outstanding household debt remained high at 81.5 per cent of gross domestic product. This continues to put pressure on family spending at different degrees depending on their respective debt burdens.
Households with high spending power, particularly for expensive items like vehicles or houses, are those with monthly incomes of more than Bt30,000.
Household debt is projected to rise further this year, to 83-84 per cent of GDP.
