Krungsri Consumer, an unsecured loan unit under Bank of Ayudhya (BAY), estimates that card spending will fall short of target this year because of stricter loan approvals for some customer segments.
The company's total credit card spending is expected to exceed 300 billion baht in 2018, 9% year-on-year growth, below its target of 320 billion, said Thakorn Piyapan, chairman of Krungsri Consumer. More stringent loan approvals for some segments, especially the mass market, to control asset quality were attributed to the shortfall.
Outstanding loans of both credit card and personal loans at Krungsri Consumer are expected to achieve their targets this year.
Total credit card loans amount to 75 billion baht, while personal loan portfolios are worth 60 billion.
Krungsri Consumer's new customers also hit the targeted 800,000, rising 8% year-on-year. Of the total, 450,000 are credit card holders, and the remainder are new personal loan borrowers.
Mr Thakorn said it has controlled non-performing loans (NPLs) of both unsecured loan products satisfactorily.
The bad-loan ratio of credit cards is around 1%, compared with the industry's 1.7%. Personal loan NPL ratio is above 2% but lower than the industry's 3% average.
"The larger lending base following the loan expansion, strong risk management and our business strategy are key factors that help control NPLs," Mr Thakorn said.
The Bank of Thailand's new regulation governing unsecured loans has also helped improve asset quality of the overall industry.
Krungsri Consumer has not received a significant impact from the stricter rule, as seen by the fact that it has maintained approval rates for both credit card and personal loans at around 40% for each product.
Mr Thakorn said competition in the credit card market has intensified in the final quarter of the year.
