Benz unit posts rise in NPLs
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SLOW PAYMENTS by car owners has driven Mercedes-Benz Leasing (Thailand)'s non-performing loans up a gear.
“Late payments in the first six months rose by 15-20 per cent year on year, making NPLs in the period increase to 0.7 per cent from 0.5 per cent as of the end of last year,” managing director Supavut Jiramanusnakorn said yesterday.
The delayed payments came from small and medium-sized customers, which make up about 30-40 per cent of its customers. They have been affected by the economic slowdown.
The company classifies its loans as NPLs if they are not serviced for over 60 days, unlike other financial institutions, which use 90 days as the threshold.
The lender has offered debt-restructuring of six to 12 months to NPL customers.
SMEs are in focus even though they are tardy in making payments because instalments on a Mercedes-Benz vehicle run about Bt20,000-Bt30,000 a month – a small amount compared to their annual income.
Commercial bus operators and transportation operators are also affected by the economic slowdown, but the group is giving importance to commercial vehicles due to the Asean Economic Community, which will promote the cross-border and logistics business.
The lender’s business with this category is still minor. Next year, the company will expand leasing to commercial vehicles including trucks and buses. The company has grown its loan portfolio from Bt13 billion in 2012 to Bt27.10 billion as of the end of June and targets Bt30 billion by year-end.
Because its loan portfolio is small, it can expand the portfolio with new loans versus repayments.
Each month, it targets new loans of Bt1 billion because it has to experience repayments of Bt600 million-Bt700 million.
The outlook for luxury vehicles so far is bright. The company plans to penetrate new customer segments – the young generation and lifestyle customers aged 35-45 who prefer to change vehicles every three to five years.
“We will offer the ‘mySTAR’ loan programme to them. It offers high flexibility with three options to attract these customers,” the company executive added.
