Krungsri First Choice trims loan growth

Krungsri First Choice aims for lending growth in the mid single digits this year, down significantly from last year, in line with the flagging economy and the central bank’s responsible lending policy.

The company expects loans outstanding to grow by 5% in 2020 after a 13% advance last year, said Nayanee Peaugkham, managing director of Ayudhya Capital Services Co Ltd.

Krungsri First Choice is a personal loan and credit card brand operated by Ayudhya Capital Services under Bank of Ayudhya.

Krungsri First Choice’s personal loan portfolio is projected to increase to 63 billion baht by year-end, up from 60.4 billion baht a year earlier.

Ayudhya Capital Services sees the number of new Krungsri First Choice customers rising by 355,000 accounts this year, down from 396,000 in 2019.

The lower business growth target for 2020 is in line with the country’s economic situation after the company saw a slowing trend starting late last year.

With the gloomy economic outlook, the company cut its debt service ratio (DSR) for new loan applicants to 70% since the start of the year from 80-100% previously.

Ms Nayanee said the economy has been dampened by the coronavirus outbreak, ebbing consumer purchasing power and deteriorating debt payment ability.

Krungsri First Choice’s non-performing loan (NPL) ratio has risen 14 basis points from the start of the year to 2.8%.

“With the difficult situation mainly due to the outbreak, the NPL ratio could further climb higher to above the existing target of 2.8% by the end of the year,” Ms Nayanee said.

The company has implemented debt restructuring measures to ease the financial burden of customers and control bad debt.

Some 800 clients have applied for debt restructuring, comprising a grace period for both interest and principal, interest rate cuts and loan maturity extension on a case-by-case basis.

Krungsri First Choice announced a major brand makeover yesterday, focusing on responsible lending under the “Build Your Credit, Build Your Future” concept and instilling financial discipline in younger borrowers.

The company’s total customer base is 2.34 million. Despite lower DSR, it has maintained the monthly income requirement for personal loan applicants at 10,000 baht.

‘‘ With the difficult situation mainly due to the outbreak, the NPL ratio could further climb higher to above the existing target of 2.8% by the end of the year.

NAYANEE PEAUGKHAM Managing director, Ayudhya Capital Services