News Column

BAY keeps 7-9% loan growth aim

July 9, 2014

By Darana Chudasri, Bangkok Post, Thailand

July 09--Bank of Ayudhya (BAY), the country's fifth-largest lender by assets, is maintaining its lending growth target at 7-9% this year despite sentiment improving after the military coup ended the political impasse.

The new signs have not had a clear impact on loan growth as it is the first stage of restoring confidence, said chief executive Noriaki Goto.

After the bank's outstanding loans at the end of March shrank 0.4% from the end of December to 939.8 billion baht, it trimmed its target for 2014 loan growth from 9-11% to 7-9% amid weak loan demand.

"Japanese investors have splashed a lot of money here after the floods [in late 2011] and they have no need for new investment at the moment," Mr Goto said.

Japanese investors have become BAY's targeted customers after Japan's largest lender, Bank of Tokyo-Mitsubishi UFJ (BTMU), acquired a 72% stake in the Thai bank in December last year.

Mr Goto said BAY aims to reduce its non-performing loans (NPLs) to 2.5% of outstanding loans this year.

Its percentage of bad loans at the end of March rose to 2.97% from 2.67% at the end of December due largely to higher NPLs among small and medium-sized enterprises (SMEs) and retail loans.

BAY is eyeing 500,000 employees of Japanese companies that have used financial services at BTMU's Bangkok branch as potential customers in addition to Thai SMEs in these companies' supply chains.

BAY yesterday launched the Krungsri Thai Benefit Package, which combines a savings account, debit card and Visa Platinum credit card.

"In the initial stage, the product will be offered mainly to Japanese expatriates who are relocating to Thailand. Our intention is to provide them with banking convenience when they arrive. We expect to expand our coverage to Japanese residents in Thailand by early next year," said Mr Goto.

The package for Japanese is in line with BAY's policy to become the primary local bank for them. It has opened a desk manned by Japanese-speaking staff at the Siam Paragon branch, with more to come.

BAY shares closed yesterday on the SET at 47 baht, up one baht, in trade worth 13 million baht.


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

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Source: Bangkok Post (Thailand)

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