Thailand's BAY to keep focus on retail lending

Bank of Ayudhya will maintain focus on retail loans, which account for 49 per cent of its lending portfolio.

According to Janice Van Ekeren, chief executive officer of BAY, the bank will expand its retail customer base, especially among currently unbanked people with a monthly income lower than Bt15,000, through its financial units: Krungsri First Choice and Srisawad Ngern Tid Lor.

While lower-income borrowers might be a risk, the bank's risk management has shown that it can keep non-performing loans under control, she said.

"Lower-income people should get an opportunity to access sources of funds, and this will not hurt the bank as long as we have good risk management," said the CEO.

The bank's NPL ratio stood at 2.39 per cent at the end of last year, the lowest since 1993, giving it room to expand its lending growth, said BAY president Philip Tan. NPLs are acceptable at 2.5 per cent because the portfolio must be expanded, he added.

BAY this year projects loan growth of 12 percent, with retail lending including microfinance being the key driver.

Van Ekeren said microfinance could be expanded to neighbouring countries, where potential customers recognise the Krungsri Auto and Sriawad Ngern Tid Lor brands via satellite television.

Krungsri is seeking local banks in Cambodia with which it can form a microfinance business.

BAY currently has two branches in Asean, both in Laos.

The bank is also seeking a licence to open a representative office in Myanmar in 2016 to service Thai corporates that have activities in the country.

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