Krungsri aims for 7% loan growth in multinationals.

Despite a contraction in loans last year, Krungsri, Bank of Ayudhya, is ambitiously targeting a 7% loan growth for its Japanese and multinational corporation (JPC/MNC) banking clients this year. This was announced by Bunsei Okubo, head of JPC/MNC banking at Krungsri, who attributed last year’s 10% loan contraction to the sluggish growth of the Thai economy and the automobile industry.

However, despite this setback, the bank still managed to generate positive income and maintain satisfactory asset quality in the JPC/MNC segment, said Bunsei.

“We foresee improving momentum of the Thai economy and the auto industry this year. Coupled with our strategic adjustments, we are bullish about the recovery of the bank’s loan growth this year.”

To achieve this ambitious target, Krungsri is set to diversify its JPC/MNC loan portfolio by expanding into other industries such as trading, electronics, and real estate, alongside its existing focus on the automobile sector. The bank also plans to harness innovative digital technologies to better support its financial products and services, and more effectively meet customer needs.

Furthermore, Bunsei emphasised the bank’s intention to expand its business segment through the environment, social, and governance (ESG) ecosystem. This expansion will be facilitated through collaboration with its Japan-based parent company, Mitsubishi UFJ Financial Group (MUFG), to offer sustainable financial solutions to customers.

Bunsei also highlighted the vital role of the Krungsri ASEAN Link initiative in growing the company’s businesses. The initiative offers a full range of financial services to help customers expand their businesses in nine countries within ASEAN.

In terms of regional markets, the bank is focusing on three high-growth economies: Vietnam, Indonesia, and the Philippines, where growth rates are predicted to hit around 5-6% this year. Bunsei noted that the bank anticipates multinational investors to shift their manufacturing bases to the region, including Thailand, amid geopolitical risks, which he expects would further bolster its JPC/MNC banking business.

Krungsri, the fifth largest lender in the country by total assets, is forecasting a GDP growth rate of 2.7% this year, which is significantly higher than last year’s 1.9%.

Despite softer economic growth over the past year, the bank still managed a marginal 0.9% loan growth in 2023 compared to the previous year.

Currently, the bank’s total outstanding JPC/MNC loans stand at 233 billion baht, with Japanese loans making up 88% of the portfolio, thereby maintaining the bank’s leading position in the country. The remaining 12% consists of multinational loans, reported Bangkok Post.