KTB aims to keep 3rd place for profits

In the first five months, KTB’s lending dropped by 2.4 per cent year on year. Vorapak said that even though there is demand for credit, the debt-service ratio of customers does not allow them borrow more. The bank wants to control the quality of its customers, and the rate of non-performing loans (NPLs) among retail customers so far this year has stabilised after surging in 2015.
Year to date, however, overall NPLs have risen by Bt20 billion.
This upward trend is mainly due to SME clients, especially enterprises with annual turnover of around Bt500 million, mostly in the steel, auto-parts and seafood businesses.
“KTB should not be aggressive [with its lending] at this time because we have to focus on risk management to control the NPLs,” he said.
KTB is well placed to benefit from government investment, which should be the key to loan growth at the state-run commercial bank.
Vorapak hopes that if the government can go ahead with its projects as scheduled, the second half will be better than the first.
Still, in his view, KTB should be conservative by increasing reserves as a buffer against debt defaults and offer help to borrowers whose debts are going bad rather |than aggressively chasing new lending.
Vorapak recently received a Financier of the Year award from Money & Banking magazine. He said the bank was able to profit from lower funding costs, interest income from borrowers, and non-interest income from fees. “We still believe that we are again well placed to rank third in terms of profit before reserves after doing so for two years consecutively,” he said.
Last year, KTB posted profit before reserves of Bt65.68 billion, while the second-placed bank, Kasikornbank, reported Bt80.86 billion, and Siam Commercial Bank Bt88.46 billion.
He said KTB had non-interest income of only 30 per cent of total revenue, lower than the other major banks, making it has smaller impact from the PromptPay. If compare to the cash management, the bank will also reduce this cost as well, he added.
Under the PromptPay, fee charge will be exempted to the sender who will transfer money in amount of no more than Bt5,000.
Yet, the implement of PromptPay will be started in November, which Vorapak said that such of impact from the PromptPay will be seen in 2017.
KTB will seek transactional fees from cash management for private companies and the government sector, and its branches will accept motorists’ traffic fines, Vorapak said.