Krungthai Card Plc (KTC), a non-bank business under Krungthai Bank (KTB), plans to offer personal loans via KTB's Pao Tang mobile application this year.
KTC plans to expand its new personal loan customers by 110,000 and grow its loan portfolio by 7% in 2023.
Phichamon Jitpentham, head of personal loans at KTC, said the digital channels would be key for acquiring new customers under a collaboration with KTB and the company's business partners.
KTB initially developed the Pao Tang app to serve the government's welfare services and economic stimulus schemes during the pandemic. There are around 40 million users of the app.
In addition to the Pao Tang app, KTC plans to offer a personal loan service on its new mobile app this year, Ms Phichamon said.
She said the company is in the process of linking up its personal loan service with the PromptPay system to allow customers to withdraw loans via the channel.
Jointly developed by related state and private agencies, PromptPay lets people receive and transfer funds electronically using their ID card or mobile phone number, instead of a bank account number.
Ms Phichamon said KTC's mobile app would let customers use non-financial information as alternative data to apply for loans.
She said the trend of rising interest rates would not affect the company's personal loan growth because the ceiling rate for loan products is capped at 25% per year under Bank of Thailand regulations.
The company expects personal loan demand to improve this year, supported by a rebound of the Thai economy and rising consumer income.
KTC chief financial officer Chutidej Chayuti said the central bank's policy rate normalisation would not have an adverse impact on the company's financial costs. The firm can manage the cost of funds under this scenario, he said.
KTC normally raises funds from the bond market and the corporate bond yield is expected to increase by 1% on average this year.
Under this scenario, the company's average financial costs would increase by no more than 0.5% this year, from around 2.4-2.5% last year, said Mr Chutidej.
Most local research houses believe the Bank of Thailand will increase its policy benchmark rate to 2% by the middle of this year, up from 1.25% at present. The central bank's Monetary Policy Committee raised its policy rate by 0.25% at its meeting in November last year, leading local banks to hike their loan rates by around 0.4%, which took effect from Jan 3.
Mr Chutidej said KTC plans to issue new debentures worth around 15 billion baht this year, of which 4.64 billion will be for the rollover of existing bonds. He said the company plans to adjust the ratio between its short-term and long-term bonds to a 20/80 split this year, from 30/70 last year, as part of its risk management amid rising interest rates and greater global economic uncertainties.
The proceeds from the new debenture issuance will cover the company's planned total loan growth of 15% this year, Mr Chutidej said.
