BFIT to boost retail lending

Business News - Thursday December 20, 2007

FINANCE / CREDIT STRATEGY

BFIT to boost retail lending

NUNTAWUN POLKUAMDEE

While claiming it still has no interest in upgrading to a banking licence, Bangkok First Investment & Trust Plc (BFIT) plans to increase its focus on retail lending next year. Sakorn Suksriwong, BFIT's chief executive officer, said the company hoped to boost its retail lending to 20% to 30% of total loans from zero now.

The finance company expects loan growth of 12% next year.

BFIT's loan portfolio is projected to reach 3.5 billion baht at the end of the year, up from 3.2 billion last year.

Dr Sakorn said the company's expansion into retail lending would be made cautiously, with credit lines capped at 200,000 baht per account to limit risk.

Non-performing loans currently stand at a relatively low 4% of total outstanding loans.

''Our loan growth has increased slightly this year, and we have focused primarily on lending to top-grade companies. But we will shift to the retail market next year with markets such as provident fund members,'' he said.

BFIT projects economic growth to pick up to 5% next year, with investment and consumer confidence increasing after the Dec 23 election.

Dr Sakorn said the company would remain a finance company, but was interested in joining hands with a strategic partner to help strengthen its competitiveness.

He said interest rate spreads next year were projected to increase to 2% from 1.5% now. Deposits, now 5.2 billion baht, were projected to rise 12% next year.

The stock market, meanwhile, is expected to remain volatile in 2008 due to continued political uncertainty and questions about government policy and exchange rate trends. Global risk factors include high oil prices and the sub-prime mortgage crisis.

BFIT Securities, a unit of BFIT, projects the SET index to reach 900 to 950 points next year, representing an upside of 12% to 18% from current valuations.

BFIT reported a nine-month net profit of 126.1 million baht, down from 241.25 million in the same period last year.

Shares of BFIT closed yesterday on the Stock Exchange of Thailand at 6.60 baht, down 15 satang, in light trade worth 660,000 baht.

Bangkok Post