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KBank sets loan growth target at 4-6%, with focus on cost-cutting, productivity, competitiveness

Jan 30. 2021
Kattiya Indaravijaya, KBank’s chief executive officer
Kattiya Indaravijaya, KBank’s chief executive officer
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By The Nation

In a bid to adapt to the “new normal”, Kasikornbank (KBank) has redefined its strategies to aim for loan growth of 4-6 per cent.

Kattiya Indaravijaya, KBank’s chief executive officer, said despite the Covid-19 vaccine, the global economy will only see a gradual recovery. 

With this in mind, KBank has announced its financial targets for 2021 as follows: 

• Loan Growth: 4-6 per cent. The bank expects strong retail loan growth of 11 to 14 per cent, SME loan growth of 2 to 4 per cent, and corporate loan growth of 1 to 3 per cent. 

• Net Interest Margin: 3.1 to 3.3 per cent in line with interest rate trends.

• Net Fee Income Growth: Low single-digit growth. Net fee income will grow from credit-card business, loan-related and fund management business.

• Cost to Income Ratio: Mid-40s. Revenue growth is under pressure due to slow economic recovery. However, the bank will focus on cost management and productivity improvement, with new investments for future growth.

• Non-performing loan ratio (gross): 4 to 4.5 per cent. The pandemic has had an impact on asset quality, while the bank is closely monitoring and reviewing asset quality. 

• Credit cost per year: Up to 160 bps. Maintaining conservative assumptions and prudent financial policy amid high uncertainty.

Kattiya said amid drastic changes in consumer behaviour and economic conditions owing to the pandemic, KBank has reviewed its business strategies so they are consistent with the new business context. These include a commitment to the principles of sustainability with adherence to the “customer-centricity” philosophy and a goal to empower every customer’s life and business by offering end-to-end services that meet customers’ needs. 

To achieve this, KBank has set the following imperatives: 

•    Developing strategies for business growth and customer responsiveness

- Upgrading digital platforms to allow customers to make payments, as well as keep track of their financial data. 

- Reimagining commercial and consumer lending to meet customers’ lifestyle and business needs while also increasing income for KBank with an acceptable risk appetite. 

- Introducing relationship managers to help retail customers make informed decisions on investment. 

- Penetrating regional markets to boost the opportunity to access customers in other Asean countries. 

- Strengthening sales and service by integrating all channels so customers can conduct transactions anytime and anywhere.

- Improving value-based productivity by optimising human resources, data, financial and technological capabilities. 

•    Creating a trusted brand via communication and management of experience. 

•    Enhancing competitiveness through:

-    Ecosystem partnership and harmonised channels.

-    Leveraging customer data to offer a personalised lending experience and achieving fair, risk-adjusted returns.

-    Proactively identifying potential risks and establishing loss prevention and detection. 

-    Regional payment and settlement.

-    Expanding data analytics capability to enhance business opportunities and operational efficiency. 

-    Cybersecurity.

-    Developing talent for an agile organisation.

-    Adopting modern, world-class technology to make

KBank a top financial service provider in the region.

Kattiya said with a strategic plan to move forward efficiently, prudent financial management and preparedness for future uncertainties, KBank will continue to maintain its strength and help the Thai economy successfully navigate this crisis.

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