News Column

KBank reveals satisfactory SME portfolio with new lending of 143 billion Baht in 1H14

July 28, 2014

ENP Newswire - 28 July 2014

Release date- 24072014 - KASIKORNBANK announced its SME Business Division's performance for the first half of 2014, with outstanding loans of 538.4 billion Baht, up 11.3 percent over-year.

New SME lending was registered at 143.4 billion Baht, or an increase of 13.9 percent, of which 35.59 billion Baht was recorded in June alone, marking the highest new loans per month in two years. Credits were mostly extended to customers in construction, agricultural and hardware businesses. Total SME revenues were equivalent to 19.5 billion Baht, up 14.3 percent, while non-performing loans (NPLs) of this segment continued to fall, to 2.66 percent. The Bank believes the overall business outlook is set to improve in the second half of this year, while SME loans for the entire year are anticipated to reach 553.45 billion Baht, up 6.8 percent over-year.

Mr. Patchara Samalapa, KBank Executive Vice President, said that the performance of the Bank's SME Business Division in the first half of 2014 was satisfactory, with outstanding loans amounting to 538.4 billion Baht, up 11.3 percent. The Division's total revenues were 19.5 billion Baht over the same period, an increase of 14.3 percent over-year. The Bank's NPLs of the SME segment over the first five months of this year stood at 2.66 percent, down from 2.82 percent at the end of 2013.

Of the total outstanding loans, new lending equaled 143.4 billion Baht, growing 13.9 percent from the same period of last year, of which 35.59 billion Baht was recorded in June alone, the highest figure for new loans per month in two years. This reflected SME entrepreneurs' confidence in economic conditions, thus demanding more loans for business expansion and working capital. Among the new customers acquired by KBank, new lending was mostly granted to businesses in the construction, agricultural and hardware industries, representing 24 percent of total new loans.

Since early this year, KBank has introduced a series of assistance measures for SMEs hit by political instability, problems with the former government's rice pledging scheme, and rising household debts; among those measures is a grace period of principle payment for a maximum of six months offered to 534 customers, representing 10.98 billion Baht. At present, 449 of these customers have been able to service debts as usual, corresponding to 8.99 billion Baht of loans, or 82 percent of total loans under the assistance program.

Mr. Patchara added that economic conditions are expected to improve in the second half of this year, given the authorities' clearer economic stimulus measures than in the first half. KBank, therefore, has upwardly revised Thailand's economic growth to 2.3 percent, while the inflation rate is expected to remain low due to the present policy of leaving the value-added tax (VAT) unchanged at 7 percent. Due to better global economic and trade activity, particularly in trade partner countries, Thailand's exports are likely to advance and, in turn, help boost SMEs with export-related businesses.

Over the second half of this year, KBank's policy will focus on giving assistance to customers in any potential crisis, in tandem with the Bank's business slogan, 'K SME Full Support for SMEs'. Credit limits, advisory service and business networking will be provided to strengthen SME businesses further. For all of 2014, KBank aims to see its outstanding SME loans reaching 553.45 billion Baht, up 6.8 percent from the previous year, while total revenues are expected to be at 39.04 billion Baht, or an increase of 10.7 percent over-year. NPLs are forecast to remain at 2.62 percent.

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Source: ENP Newswire

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