Thanachart Bank pushes to build up personal-loan segment again

Category: Personal Loans Published: Friday, 10 October 2014 Written by Admin
Thanachart Bank has started chasing personal loans again as demand for auto loans, one of its major portfolios, remains fragile.

The bank has attempted to build up brand awareness in the area of personal loans and its Flash cash cards through advertising and social media, pushing the message that people could pursue their dreams.

Thiranard Puangmaha, first vice president of the bank, said its outstanding personal loans were Bt300 billion, higher than its Bt270 billion in credit-card loans, but customers were more familiar with credit cards.

TBank is conducting a social-media campaign focusing on Buakhao Banchamek, a Muay Thai boxer whom the bank considers an icon of dreams coming true.

After building brand awareness for its personal-loan products, the next step was finding a way to approach people and get them to use this service. Therefore, it launched an additional campaign by inviting people write about their dreams, with a chance to win Bt100,000. Ten winners will be chosen by Buakhao.

Thiranard said personal loans were a high-yield product, so the bank considers that it should be active in this category to help sustain yield but also to help diversify its retail-banking portfolio, which mostly depends on auto financing.

Retail banking accounted for 70 per cent of TBanks total loan portfolio of Bt783 billion at the end of the first half of this year.

TBank is the market leader in auto lending, with outstanding loans of more than Bt400 billion, and when this segment was affected by the governments first-car tax-incentive scheme, lenders needed to find strategies to sustain their profitability.

Banks including us have remained more cautious on personal loans because of concerns over the high levels of household debt. Therefore, even though the bank will again become more active in this segment, we still have to careful, she said.

TBanks personal-loan portfolio including cash cards has grown by 9 per cent from a year earlier, compared with 18-19 per cent in 2011 and 2012. She said that the recovery of consumer confidence could help the performance of this category a little, probably managing double-digit growth for the full year. However, the growth figure is unlikely to reach the levels seen in 2011-12.

TBanks Flash products this year are targeted to grow at a higher rate than the overall cash-card market, and Thiranard said the bank was planning to combine its cash cards and personal loans into a single product in an effort to persuade clients to take out personal loans. The new combined product will be launched next year.

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