The bank's loan approval conditions focused on the bank's core business ? auto hire-purchase loans ? and commercial loans to property developers, noting it would only finance low-rise projects developed by its existing clients.
For auto leasing loans, the bank increased its down payment requirement to 15% of the car's price, up from 5-10% earlier depending on the customer's credit risk. It also cut the lease duration to five years maximum, with leasing for used cars extended to nine years maximum.
In 2013, the bank's auto loan portfolio stood at
He said the bank expected rising NPLs throughout this year along with sluggish loan growth because of the economic slowdown amid ongoing political tension. It aims to control bad debt at a ceiling of 3.5% this year thanks to stronger risk management and adding loan loss reserves as needed.
"We will pay more attention to qualitative provisions with excess reserves of
Used car appraisal prices have normalised after falling by 20-25% last year as a result of the first-time car-buyer tax rebate in 2012 led to a higher number of seized car, some 12,000 units, up from normally around 5,000 units per year.
Kiatnakin, a local small-sized bank, expects total loan growth this year in the single digits, down from an earlier forecast of 21% three months ago assuming the country's GDP is 4.3%. It cut its growth forecast to 2.8%.
The bank aims to expand its auto and corporate loans to a combined
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