KBank expects recovery to boost SME loans

"The bank's outstanding SMEs loans in 2010 are expected to reach Bt390 billion, up from Bt360 billion last year. Meanwhile, total outstanding SMEs loans [of all banks] next year are estimated at Bt1.3 trillion," executive vice president Pakorn Partanapat said yesterday.

As a result, the bank expects its revenue from interest and fees to grow by 19 per cent to Bt23 billion next year.

In 2010, the number of SMEs in the country is expected to increase to 2.41 million companies, from 2.37 million this year.

Of this total, medium-sized companies with an annual turnover of between Bt50 million and Bt400 million are expected to grow by 5.7 per cent, and small firms with annual revenue of Bt10 million-Bt50 million by 14-16 per cent.

For this year, Pakorn expects Kasikornbank's outstanding SMEs loans to grow by 4-5 per cent to Bt360 billion, giving it the biggest market share with 27 per cent. This could enable the bank to book overall revenue of Bt19 billion, he said.

"Due to clear signals of a Thai economic recovery, SMEs have used their credit for working capital," he added.

The bank expects its non-performing loans to stand at 3.5-4 per cent of overall outstanding lending this year.

Kasikornbank is ready to extend more SMEs loans under the government's Thai Khemkhaeng scheme, especially to those in the contractor and building-materials businesses, which represent about 20 per cent of the customer base, said Pakorn.

In addition, it targets SMEs in the agricultural and food sectors.

He said the bank expected to increase its market share for SMEs loans to 30 per cent in 2012, paving the way for it to become the "Bank for SMEs".