Kiatnakin Bank shifts loan strategy as virus takes business toll

[rooster59]

Kiatnakin Bank shifts loan strategy as virus takes business toll

By The Nation

 

 

Kiatnakin Bank (KKP) is cutting the number of unsecured loans it grants so as to reduce risks from the economic slowdown amid the Covid-19 pandemic.

 

 

CEO Aphinant Klewpatinond said the bank was more able to control risks from secured loans than from unsecured ones.

 

"About 3 per cent of our customers have unsecured loans and some have taken up the offer to suspend their repayments. Our focus on granting more secured loans should see the proportion of unsecured loans decrease automatically," he said.

 

However, he said granting secured loans was not without risk amid high volatility in the economy due to the Covid-19 pandemic.

 

"We have to consider granting loans carefully because it won’t be worth it if [debt defaults] lead to collateral seizures and an oversupply of collateral assets that results in their value dropping," he said.

 

"We will consider borrowers' means, such as their income. If their business has risks, we may have to reduce their loan."

 

He added that the bank has changed strategy to attract more customers with stronger dependability by, for instance, granting loans for buying cars that are popular in the market.

 

"This is not a time to cut interest to win the competition with other banks, because there are lots of risks at present," he said.

 

"The bank will consider adjusting interest in line with the market,” he added."

 

Source: https://www.nationthailand.com/business/30392623

 

-- © Copyright The Nation Thailand 2020-08-08

 

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[anchadian]

CEO Aphinant Klewpatinond said the bank was more able to control risks from secured loans than from unsecured ones.

________________________________________________________________________________________________________

 

Never would have thought it.  That does make sense.

[Bender Rodriguez]

time to get my money out of that bank, but locked till half 2021 ????

 

never again

 

as I withdrew money 1 month early to give to my child, in the same branch & bank (before divorce), and I lost interest for the last 35 months

 

greedy ex tried to get half of my total amount, but the lost interest was worth it, well, worth ... the bank did not want to consider it was merely a transfer and not withdrawal ...

[Cake Monster]

Just one more Bank tightening the screw on borrowing.

They are petrified that they will have a massive amount of Collateral Assets on their books that will not be worth the value of the Loans provided against them.

When Loans are offered for a Car Loan with only 10% down payment, that is just idiotic lending from the Bank, as the asset devalues over time, and is worthless.

[RichardColeman]

13 hours ago, rooster59 said:

 

"We will consider borrowers' means, such as their income.

By eck, you mean they have a history of ignoring income ? 

[wordchild]

I know the Kiatnakin people pretty well.

FWIW, just my opinion, it is one of the best run banks in Thailand.

However, they do operate at the riskier end of the credit spectrum ie  mostly secured , but lower quality customers than the average Thai bank, (and they run the business accordingly).

So even they will take a few extra hits this time around. They are obviously getting prepared for this. They are rightly, in my opinion, concerned about second hand auto and motorcycle values, particularly certain less popular brands. And they are putting more emphasis on their borrowers profile not just on the underlying asset security. 
From what I see and hear this is not a new strategy by them and they have been running the bank along these lines for the last year or so.
 

Listen carefully to what he says.

They started the year  by being pretty cautious, ( as far as I am aware) about the Thai economy, it sounds like they are getting more cautious. 

Edited August 8, 2020 by wordchild

[DaftToPutRealName]

 

 

1 hour ago, RichardColeman said:

By eck, you mean they have a history of ignoring income ? 

I've seen a few car tent ad places around saying they'll push through documents no matter what.
More scary is that they state if your income is over 15k, you can get an 11k a month loan approved 100%.

I don't know who's stupider in that scenario - the 7-11 attendant getting a new Mazda or the tent operator sorting the loan out...

[Leaver]

I wonder which Thai bank there will be a run on first?  Only a matter of time.