Summit Capital Leasing shows 30% revenue growth

Lending increased by 53 per cent from the same period of the previous year, attributed to aggressive business expansion nationwide. 

Summit Capital chief executive officer Wichit Phayuhanaveechai is confident that loan growth will exceed target with an increase of 27.44 per cent to Bt4.1 billion this year. 

Wichit said that in the first nine months of this year, the registration of motorcycles decreased by 2 per cent compared with the same period of 2014. This was a result of several negative factors, including the overall economic conditions that are not likely to improve soon, falling prices of agricultural products and a 5-per-cent export contraction. 

These conditions affected the labour force, while the tourism industry was also hit hard by the unrest in the past.

The motorcycle market in Thailand has seen continued slow growth since last year, when sales decreased by 16.48 per cent from those of 2013. Sales from January to September 2015 decreased by 2 per cent year on year. 

However, even though the economy remains stagnant, the company was able to report better-than-expected results, 30 per cent higher than targeted. This was a result of a 53-per-cent increase in loan growth compared with the same period of 2014, exceeding Bt3 billion. The company expects loan growth of 35 per cent in the final three months of the year, judging from its performance in the first nine months. 

“To date, most of our borrowers are in the Central and Eastern regions of Thailand. The key factor contributing to our growth is our aggressive business expansion nationwide, including the Northeastern, Central and Southern regions. We intend to open a new branch every month in these regions to expand our customer base,” Wichit said. 

The company says another supportive factor is a robust, proactive relationship management strategy that it has implemented to build relationships with local stores. It focuses on friendly service, while participating in planning the stores’ marketing strategies so that they can run their business smoothly. This has resulted in a 32.85-per-cent increase in the number of partnered motorcycle stores since 2014. 

The company also gives importance to its sales strategy that emphasises the quality of customers over quantity. It says it has a highly effective risk-management system to control the credit-approval process, along with a debt-collection process operated by highly experienced staff. Thanks to these, the rate of non-performing loans stood at 1.18 per cent of the total portfolio in the first nine months.

For the final quarter of 2015, the company sees the need to conduct business with caution and monitor the economic situation closely to ensure minimal impact on the business. Meanwhile, it will move ahead with plans to open new branches in areas with potential for economic stability. 

Recently, Summit Capital has taken an aggressive market-penetration approach in the South for the first time in more than 20 years. Nakhon Si Thammarat is a pilot province where it recently opened a new branch.

In the first eight months of 2015, the South accounted for 17 per cent of the new motorcycle registrations nationwide. This makes the region the third-largest in this regard, behind the Northeastern and Northern regions, which accounted for 34 and 19 per cent respectively. 

Surat Thani province alone saw an average of 2,300-2,400 new motorcycle registrations a month. It is in the forefront of provinces with the highest rate of new registrations in the South, second to Songkhla. 

Before opening a new permanent branch in Surat Thani province in early September, the company conducted a market survey and found that during the previous three months, it had lent about Bt35 million to customers there. This was a result of its relationship with partnered stores in the South. 

To date, more than 30 per cent of motorcycle stores in the area have become its partners.