KBank expects 15% rise in corporate loans

Business News - Monday December 17, 2007

Bangkok Post

BANKING OUTLOOK

KBank expects 15% rise in corporate loans

DARANA CHUDASRI

Kasikornbank expects new business lending to rise to 90 to 100 billion baht in 2008, up 15% from a projected 65 billion in new lending this year, according to executive vice-president Boontuck Wungcharoen.

Outstanding loans for the bank's business segment, which includes small business loans, were projected to rise to 650 billion baht by the end of 2008 from 550 billion at the end of this year.

The bank is targetting 20% growth for its small and medium-sized business segment, up from 11-12% growth this year. Large corporate loans are expected to post growth of around 8% next year.

Mr Boontuck said small business loans now accounted for nearly half of the bank's total outstanding loans of 726 billion baht.

KBank, the country's fourth largest bank after Bangkok Bank, Krung Thai and Siam Commercial Bank, said corporate lending was likely to miss targets this year as the bank's focus had shifted more toward fee-based activities rather than outright loan growth.

''Our focus isn't really just to book loans, and we prefer to be a loan originator of syndicated loans or issue bonds,'' Mr Boontuck said.

He said syndicated lending was a means of helping the bank reduce concentration risk, and pointed to the 30-billion-baht syndicated loan for Esso as an example.

KBank is the co-lead with Krung Thai Bank for the syndication, and expects to lend five billion baht in the deal, to be wrapped up by Christmas.

Mr Boontuck said capital market operations such as bond issuance and advisory services would help increase fee-based income, and that the bank eventually hoped to direct similar services toward its small and medium-sized business clients.

The bank's business segment, including small business and corporate clients, accounts for 30-35% of total fee-based income, a figure it wants to increase to 50% by 2010. Mr Boontuck said KBank also planned to expand its links with educational institutions to expand advisory, research and training services to small and medium-sized clients.