jontusingh: KBank to focus corporate loans on medium-sized enterprises

Wednesday, December 26, 2012

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KBank

Sucheera Pinijparakarn

The Nation
December 26, 2012 1:00 am

KBank targets corporate loans in 2013 to grow by 4-6 per cent from the outstanding loans of Bt388 billion as at the end of this year, with a key driver being trade finance in line with a rebound in export volumes, he said.

KBank expects export growth in 2013 will recover to 12.5 per cent from 4 per cent this year.

The proportion of trade finance/ working capital loans in 2013 will be increased from 60 per cent currently, he said.

Companies that require funds for investment are expected to mobilise them from the capital market, which is an opportunity for financial advisory services and non-interest income.

KBank has three strategies for its corporate business, focusing on fund-raising advisory, financial advisory for corporate restructuring, and cash-management |solutions.

Non-interest income in 2013 |is projected to expand by more |than 17 per cent, increasing its |proportion of overall income to |2.9 per cent from 2.62 per cent in 2012.

Thai traders have become more active in emerging markets, but these have high risk because those countries have few regulations to protect foreign investors, unlike the European and US markets. Risk-protection services, therefore, are another focus of KBank, Vasin said.

"Lending is likely not expanding much because the bank wants to help customers, especially medium-size corporates with annual sales of [about] Bt400 million, prepare themselves at home before going abroad," he said. "Hence we give importance to helping corporates improve efficiencies in terms of operations, strategies and risk protection."

The picture of Thai enterprise today is unlike in the past because Thailand is no longer a cheap-labour country, he noted. Meanwhile, many emerging markets are becoming attractive places to invest, so Thai firms should not wait for foreign direct investment as in the past - they must expand their businesses themselves.