KBank expects corporate business loans to increase 6-8% in 2018
Driven by EEC and Digital Economy
KASIKORNBANK (KBank) unveiled their operating results in 2017, with better-than-target corporate business performance. Corporate loans surged 12 percent YoY, and outstanding industries included property, construction and F&B. In 2018, economic growth is expected to be driven by the advent of Eastern Economic Corridor (EEC) and Digital Economy, leading to higher loans and fee income by 6-8 percent YoY and 2-5 percent YoY, respectively.
KBank Executive Vice President Suwat Techawatanawana elaborated on the performance of the Corporate Business Division that supervises large corporate customers of KBank. In 2017, total loans amounted to THB573,521 million, rising 12 percent over 2016. Total revenue and fee income were reported at THB24,882 million and THB12,153 million, representing growth of 8 percent YoY and 9 percent YoY, respectively. Higher-than-target loans were mainly supported by the property, construction and F&B businesses.
Mr. Panop Ansusinha, Investment Banking Business Division Head, said that the Thai business sector is seeking fund mobilization in various forms, amid rising investments in large-scale infrastructure development, property projects along mass transit routes, and other sizeable projects of business construction and expansion. Fund raising may be conducted via establishment of REITs, cofinancing, project financing, fund mobilization for business acquisition, joint venture and listing on the stock exchange, all of which are gaining much interest of domestic and international enterprises. In 2017, total IPOs conducted by KBank customers recorded the top value in the market at THB54 billion.
Mr. Silawat Santivisat, Executive Vice President, added that KBank has earnestly promoted the use and the linkage of channels for making and accepting payment for customers with the use of digital technologies and cutting-edge innovations in order to enhance their competitive capabilities in keeping with the government’s National e-Payment Master Plan and the changing consumer behavior to embrace the cashless society. Of late, electronic transactions have risen steadily, as evidenced by the number of users in various e-services. For instance, users of electronic banking service have surged 60 percent, electronic international trade service, 20 percent and electronic letter of guarantee, 21 percent. Meanwhile, e-Collection via K-ATM, K-Cyber Banking and K PLUS climbed 57 percent. Obviously, customers are increasingly relying on electronic system in 2018 thanks to data connectivity, convenience and service efficiency. Retail clients have been shifting to mobile transactions via K PLUS or QR code. Amid the coming cashless society, large corporations are going to adopt new technologies to accommodate customer demand, increase sales and embrace new business opportunities.
Mr. Suwat added that the Thai economy should continue to grow in 2018 amid signs of economic recoveries seen in Thailand’s trade partners, favorable export performance, better-than-expected growth in tourism continuing from last year and a substantial increase in public investment, especially for various projects within the EEC, which is believed to be a key investment driver for 2018. Currently, the government’s EEC scheme has progressed markedly in many ways.
The National Legislative Assembly’s recent approval of the bill on development of the EEC is a key toward building investor confidence, which will in turn help reinvigorate long-term investment within this area. KResearch has projected that this bill, once enacted, will help bolster the value of investment promotion applications to THB400 billion by 2022, over the THB283 billion reported for 2017.
Digital Economy is a key economic driver that corporate business customers have been strongly interested in. KBank has played a pivotal role in creating online interconnectivity of business and retail customer segments by drawing support from our partners or corporate business customers to optimize benefits in the business cycle covering corporate business customers, counterparties and retail customers, via digital financial tools, namely EDC, QR Payment and K PLUS, to cater to all customer lifestyles.
Due to the abovementioned projections, the Thai economy should further pick up this year, driven by supportive factors such as the EEC and Digital Economy. KBank is confident that corporate business performance will meet the growth targets of 6-8 percent YoY and 2-5 percent YoY for total loans and fee income, respectively.