CIMB Thai Bank Pcl is targeting 20 per cent growth this year in fees from underwriting bonds, merger advice and investment products, in a strategic shift towards non-interest income as appetite for credit in Thailand wanes, its CEO said.
Thailand’s economy is underperforming regional peers as consumers and small firms pay off debts accrued under a populist government toppled by the military in 2014. Growth is forecast at just over three per cent for 2016, up from 2.8 per cent in 2015.
“The economy will continue to be quite sluggish,” CIMB Thai chief executive Subhak Siwaraksa told Reuters in an interview on Thursday. “We have adjusted our business strategy. You have to recognise that as a bank now we do more than loans.”
CIMB Thai Bank, a unit of Malaysia’s CIMB Group Holding Bhd, is Thailand’s ninth-biggest lender by assets.
Revenue generated from the non-interest side of the business accounted for about 40 per cent of the firm’s total, Subhak said. The firm is one of Thailand’s top-two bond underwriters and has about 50 per cent of the market in structured products, he said.
CIMB Thai still expected to grow its retail loan portfolio 10 per cent this year, and corporate loans by 10 to 15 per cent, he said, even with relatively slow economic growth.
The bank’s bad loan portfolio should peak in 2017 at around four per cent, he said, up from below three per cent now. — Reuters