The ambitious revenue development is largely from high-yield products, such as used car loans and auto refinance, said Narong Srichukrin, very first executive vice-president. Rising used automobile prices have revved up loan demand in the companybusiness sector, he said.
The bank plans to raise the proportion of the two loan products this year, while the ratio of new car loans would decline to be in line with lukewarm new auto sales, Mr Narong said without revealing the new ratios.
Used vehicleauto loan now represent 25% of SCBs overall carvehicle loan, and automobile refinance, under the My Car My Money (MCMC) brand, stands at 17%, up from 24% and 14%, respectively, in the first quarter of in 2014.
The two high-yield products will create high income this year, he stated.
The banks used carvehicle loan is charged at 3-3.5% per year, MCMCs interest rate stands at 2.8-3%, while brand-new automobile loans are 2%. Fee-based earnings from motor insurance will also boost earnings development.
While the bank has cut the minimum financing rate by 25 basis points, the rate of interest for new vehiclevehicle loan is anticipated to be unchanged provided the existing low level. Sluggish demand for brand-new vehicleauto loan and low competitors in the businessbusiness sector will not press rate of interest.
SCB, the countrys third-largest bank by assets, tasks flat rate development of its car loan portfolio at around B170 billion this year.
< ins class = adsbygoogle. design = display: inline-block; width:468 px; height:60 px. data-ad-client = ca-pub-8244532471699971. data-ad-slot = 9552394049 > Although the bank is targeting B70 billion in brand-new automobile loans this year, this will offset loan payments, leaving growth at a flat rate.
Its car loans in the very first quarter grew by a meagre 0.3% from completion of in 2014.
The banks non-performing auto loans are anticipated to rise to 2.1% this year due to the fact that of development in riskier products used automobileauto loan and MCMC but views the rate as acceptable compared with the returns.
Bad loans just recently was up to 1.9-2% from 2.2% at the end of 2015.
SCB shares closed Friday (Apr 29) on the SET at 133.50 baht, up 2.50 baht, in trade worth 534 million baht.
Check out initial story here.