Kasikornbank (KBank), the country's third-largest lender by assets, expects lending growth this year to outpace its 5-7% target range, buoyed by a growing economy.
The loan growth momentum is expected to continue into the second half because of the economic recovery and seasonal factors after expanding at a robust pace in the January-March quarter, said Predee Daochai, president of KBank.
The bank's outstanding loans rose by 2% from the end of last year to 1.83 billion baht at the end of March.
Despite the rosier outlook, KBank will keep its 2018 lending target band unchanged, Mr Predee said.
Thailand delivered surprising first-quarter economic growth of 4.8% year-on-year -- the fastest clip in five years. That prompted the National Economic and Social Development Board to raise its economic growth outlook to 4.2-4.7% this year from 3.6-4.6%, and the Finance Ministry revised up its growth projection to 4.5% from 4.2%.
KBank, which has the country's most popular mobile banking app with more than 8 million users, expects to see a change in its revenue structure after announcing in late April that it would scrap transaction fees for the digital channel, Mr Predee said, adding that transaction fee income typically generates a large portion of total fee-based income.
After the bank permanently waived digital transaction fees for inter-bank and cross-clearing zone fund transfers, bill payment and top-ups, starting March 28, it slashed its non-interest income target for this year to a contraction of 6-8% from no growth targeted previously.
During the January-March quarter, KBank posted a 1.8% year-on-year increase in interest income to 29.9 billion baht, but non-interest income fell 2.6% on the same period last year to 15.1 billion.
"The revenue structure is being changed because fee income contributed by internet and mobile banking has disappeared," Mr Predee said. "Earlier, [mobile banking app] K Plus contributed positive fee income."
But the bank will employ a digital banking platform to create new sources of income to replace the forgone revenue, he said.
The bank's technology subsidiary, Kasikorn Business Technology Group (KBTG), has embedded artificial intelligence technology into K Plus through a new feature called K Plus AI-Driven Experience (KADE). With the in-depth data analytics of each individual customer under KADE, the bank can offer financial services that meet the demands and lifestyle of each K Plus user and users of K Plus Shop, the mobile app for merchants.
Fee-based income contributed by other business segments and financial subsidiaries such as card business, bancassurance and mutual funds remains in healthy shape.
The bank has maintained its interest and fee income ratio at 60:40, Mr Predee said.
KBANK shares closed Friday on the Stock Exchange of Thailand at 192 baht, an increase of 50 satang, in trade worth 1.13 billion baht.
