News Column

CIMBT targeting small fry

July 3, 2014

By Somruedi Banchongduang, Bangkok Post, Thailand



July 03--CIMB Thai Bank (CIMBT) plans to increase loans to small companies as demand for financing picks up in the second half of this year on the back of an improving economy.

Smaller SMEs with a credit line of 300,000 to 20 million baht are the bank's target customers, said Jiratchyuth Amyongka, senior executive vice-president and head of commercial banking.

Small businesses contribute an 8-10% margin to the bank, higher than that of medium-sized firms.

The loan quality of such companies is typically the best, Mr Jiratchyuth said, as nearly all are self-employed individuals or mom-and-pop shops that are quite conservative in running their business.

CIMBT, 93.15% owned by Malaysia'sCIMB Group, plans to expand its small-business loan portfolio to 10 billion baht or 15% of outstanding SME loans in the next three years, up from 2.25 billion and 5% now.

The SME loan portfolio stands at 45 billion baht, 42.8 billion of which is dominated by bigger SME loans, which were the bank's focus in recent years.

The bank restructured its SME loan business, renaming it the commercial banking group in March.

CIMBT set an ambitious growth target for SME loans of 11 billion baht this year, an increase of 22% from last year.

While SME loan demand faltered in the first half of this year on account of the lacklustre economy, CIMBT still considers the full-year target reachable as the economic rebound gains traction.

During the first five months, the bank's total SME loans rose marginally to 45 billion baht from a level of 43 billion at the end of last year.

SMEs were hurt by the months-long political impasse, and helping them is one of the military regime's priorities.

"Despite minimal loan growth in the first five months, CIMBT beat its revenue target by recording 680 million baht over the period compared to its full-year goal of 1 billion," Mr Jiratchyuth said.

Improving demand for SME loans is likely to persist through the second half in light of stronger economic momentum and investor confidence.

CIMBT shares closed yesterday on the Stock Exchange of Thailand at 2.20 baht, up eight satang, in trade worth 35.1 million baht.

___

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

Visit the Bangkok Post (Bangkok, Thailand) at www.bangkokpost.com

Distributed by MCT Information Services


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Bangkok Post (Thailand)


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters