KBank restricts digital personal loans to refine business model

Kasikornbank (KBank), known for its leading mobile banking services, has strategically slowed down its digital personal loan operations. The move aims to refine its business model and enhance the quality of its loan products, according to its Chief Executive Kattiya Indaravijaya.

Kattiya revealed that there is no specific timeline for the completion of the business model improvement. However, she assured that the loan expansion will resume once the bank is prepared.

She also highlighted that this deceleration in expanding digital personal loans is unlikely to significantly impact the bank’s overall loan growth. This is because digital loans make up a relatively small part of its total loan portfolio.

KBank, the third-largest lender in the country by total assets, is a prominent player in mobile banking services. The bank boasts around 22 million users on its K-Plus platform. The bank’s digital loan services offered through the Line BK platform were also said to have a promising outlook.

The bank has set an ambitious target to achieve total loan growth of 3 to 5% this year. Despite a slight year-on-year decline of 0.19%, the bank posted a quarterly loan growth of 2.15% in the first quarter.

The Chief Executive of Kasikorn Line, Tana Pothikamjorn, the operator of Line BK, stated that the company has made significant strides in enhancing its asset quality over the past two years. This has been achieved through the development of its business model, which leverages advancements in machine learning and artificial intelligence to bolster business efficiency.

Line BK, a social banking platform venture between KBank and Line Corporation, has seen a significant improvement in non-performing loans, which have been reduced to 4% of the total loan portfolio. This has been achieved through more stringent risk management and more selective loan approval processes.

While the company’s total loan portfolio remained largely unchanged at around 20 billion baht in the first quarter of this year, Tana emphasises their commitment to serving underserved segments. This includes self-employed individuals, freelancers, and farmers, to ensure they have appropriate access to funding sources, reported Bangkok Post.