Kasikornbank (KBank) plans to expand its digital lending this year with stronger control of loan quality, while also growing its mobile banking user numbers.
Digital loan demand via the bank's mobile app K-Plus has been rising, said KBank co-president Krit Jitjang. The app averages 1.5 million loan applications per month.
Yet the bank's approval rate for loans is low at only 1% of total applications, as a result of a strong risk management structure, he said.
The bank had improved the infrastructure of its digital loan service in several areas, especially databases, debt collection, and credit scoring of customer sub-segments, said Mr Krit.
The development should improve service capacity, in particular regarding the risk management system. If the bank can better control asset quality, the approval rate of digital loan extensions could increase as well.
Even though the bank has offered digital loans for a while, it still needs to fine-tune the service. The bank needs to make sure that customers do not borrow from KBank to repay debt at other banks because this is a big factor which makes digital loan products non-performing, Mr Krit said.
The bank is ready to further test and develop loan products and allow a higher NPL for unsecured digital loans, compared with secured-loan products. It said the NPL ratio for its digital loans is currently at an acceptable level.
KBank, the country's second-largest lender by total assets, is ranked as the industry's No.1 in mobile banking service, based on total K-Plus users of around 21 million. The bank plans to increase K-Plus user numbers to 24 million by the end of this year.
Another digital loan platform run by KBank's subsidiary Line BK is also showing strong lending growth. The bank expects Line BK to book a net profit in 2025 after offering digital loans since October 2022.
Mr Krit said K-Plus and Line BK have seen strong demand for their loans, which covers wider market groups including the underbanked and unbanked segments.
The bank has also studied the Bank of Thailand's plan to launch virtual banking licences. KBank said it needs to study the details of the licence first to see what new business areas it offers.
According to its 2023 financial goals, KBank is targeting loan growth of 5-7%, mainly from a regional expansion strategy that seeks new sources of revenue alongside more diversification and greater corporate lending.
KBank aims to grow its corporate loans by 4-6%, small and medium-sized enterprise loans by 1-2%, and retail loans by 2-4%.