Krungsri Consumer, an unsecured-lending unit under Bank of Ayudhya (BAY), expects new personal loan account growth to be flat this year at 300,000 because of the lingering effects of the Bank of Thailand's tightened regulations for those earning less than 30,000 baht a month and termination of the direct sales channel for credit cards and personal loan products.
Thakorn: Credit card rejection rate stable
The company has lost tens of thousands of new accounts a year after the cancellation of the direct sales channel, while the central bank's regulations have also dented new account growth.
Krungsri Consumer aims for 300,000 new personal loan accounts this year, the same level as last year, said chairman Thakorn Piyaphan.
For the first two months this year, there were 80,000 personal loan applications and 2-3% were rejected as applicants were earning below 30,000 baht a month and they were already borrowers with three personal loan lenders, Mr Thakorn said.
According to Bank of Thailand measures effective from Sept 1 last year, those who earn less than 30,000 baht have been granted no more than 1.5 times monthly income per creditor and have been limited to three personal loan creditors.
Krungsri Consumer last year stopped outsourcing contracts for the direct sales channel, mainly because of the channel's lower potential for customer acquisition and higher operating costs.
The company has 2.7 million personal loan accounts, of which 65% are for people earning under 30,000 baht a month. The personal loan portfolio amounts to 70 billion baht.
For credit cards, Krungsri Consumer aims for 400,000-500,000 new credit cards this year, Mr Thakorn said. The company had 100,000 credit card applications during the two months to February, of which half were rejected.
The rejection rate for credit cards is similar to last year's, he said.
The company has 8.2 million credit cards circulating in the market, held by 5.6 million people.
Krungsri Consumer, the country's largest credit card issuer, aims for 15% growth in overseas spending through cards this year from 12 billion baht in 2017.
The company expects that card spending in Japan will jump by 20% in 2018 from 1.7 billion baht last year.
Japan is among the top three international destinations where Krungsri Consumer cardholders spend, making up 18% of overseas spending by the company's clients.
