News Column

Ayudhya Capital confident

June 27, 2014

By Somruedi Banchongduang, Bangkok Post, Thailand

June 27--Ayudhya Capital Auto Lease, a lender under the Krungsri Auto brand, is maintaining this year's new-loan growth target of 8% for motorcycles despite an expected fall in sales.

Economic momentum and consumer confidence will be key factors to support the company's loan expansion, said managing director Pairote Cheunkrut.

Domestic motorcycle sales are forecast to reach 1.85 million this year, down 7% from 1.99 million last year.

The country's macroenvironment is gaining ground after the coup eliminated the political uncertainty that had clouded Thailand for months.

For the first five months, Ayudhya Capital's new loans for standard motorcycles expanded 2% from the end of last year even though motorcycle sales declined by as much as 20% over the same period last year.

However, its new loans extended for big-bike purchases surged 26% from the end of last year.

The company forecasts that sales and loan growth for big bikes will expand at the same rate of 20% this year.

It has increased its staff to allow potential customers, particularly those upcountry, to tap funding sources more easily.

The provincial market offers high potential. Rice farmers are the company's key customers and their loan demand has improved since they received payment for their paddy pledged under the rice scheme.

Ayudhya Capital, a unit of Bank of Ayudhya, ranks as the country's top lender for motorcycles.

The company has recruited more debt collectors to prevent its bad loans from rising.

It projects that its outstanding motorcycle loans will rise in value by 20% to 12 billion baht this year from 10 billion in 2013.

Of the 10 billion baht, 7.5 billion will be extended for regular motorcycles and the remaining 2.5 billion for big bikes.

Ayudhya Capital has managed to keep its non-performing loans at below 2% of its total credit, thanks to diversifying its motorcycle loan portfolio and the lower risk of big-bike lending.

The company charges a minimum rate of 4% a year for borrowers buying big bikes, 1.59% a month for standard motorcycles and 2.65% a year for new cars.


(c)2014 the Bangkok Post (Bangkok, Thailand)

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Source: Bangkok Post (Thailand)

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