Kasikornbank (KBank), the leader in small and medium-sized enterprise (SME) loans, has been forced to change its strategy for the segment in light of more intense competition.
The lender is paying closer attention to the asset quality of SMEs while turning down customers seeking to refinance debt from other banks.
Patchara Samalapa, an executive vice-president, said KBank has gradually reduced its SME debt-refinancing portfolio from an earlier ratio of 30% of total new loans.
Admittedly, this is the result of several of KBank’s medium-sized customers turning to other banks because of tougher competition in the SME market. Other lenders have been luring SMEs by offering lower rates and higher credit lines.
But Mr Patchara noted that debt refinancing used to be an area in which KBank had an edge.
“Debt-refinancing strategy is a method you can do all the time, as it does not need healthy loan demand or a strong economy to support growth,” he said.
“It depends on what you offer clients of other banks. Also, it allows banks to be selective.”
Siam Commercial Bank and TMB Bank have announced plans to use debt refinancing to capture new SME customers with aggressive targets.
Despite its own more cautious strategy, KBank, the country’s fourth-largest bank by assets and the top SME lender with a 440-billion-baht portfolio as of last month,
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