KRUNGSRI CONSUMER Group, a subsidiary of Krungsri Bank (Bank of Ayudhya), will expand its business into Cambodia, Vietnam and Myanmar within the next three to five years, following the success of its operation in the Lao capital since its establishment there in December 2014.
In Laos, the company plans to open branches in Pakse and Suwannaket in two and three years' time, respectively, group head Thakorn Piyapan said after visiting its subsidiary, Krungsri Leasing Service, in Vientiane last weekend.
The group is negotiating with a strategic partner in Cambodia and the terms could be finalised for that market this year, with the business commencing operations in 2017, he said.
The business in Cambodia will primarily focus on micro-finance, followed by loans for the purchase of home appliances and mobile phones, First Choice personal loans, and credit cards.
In Vietnam, the company is studying doing business with its parent, the Bank of Tokyo-Mitsubishi UFJ, which holds a 72.01-per-cent stake in Bank of Ayudhya.
Bank of Ayudhya also has a business in Vietnam.
"We target expanding our business in Vietnam within the next three years, focusing on hire purchase for motorcycles and cars, then First Choice and personal loans," Thakorn explained.
The group is also considering expanding into Myanmar, with the business concentrating on micro-finance, personal loans and First Choice operations.
"Our strategy over the next five years will be to expand our business in CLMV countries [Cambodia, Laos, Myanmar and Vietnam], after seeing strong economic growth in this area," he added.
Meanwhile, in Thailand this year, Krungsri Consumer Group is targeting overall business growth of up to 12 per cent.
Thakorn said that in terms of credit-card spending, value is estimated to grow by as much as 12 per cent, from Bt260 billion last year, while new personal-loan business should rise by between 6 per cent and 7 per cent from last year's level of Bt66 billion.
"Our estimates are based on domestic economic growth of 3 per cent for this year," he added.
Meanwhile, non-performing loans will be maintained at no more than 1.45 per cent for credit cards, and 3.5 per cent for personal loans. Thakorn said the impact from additional household debt arising from lending under the first-car scheme - launched four years ago by the Yingluck Shinawatra-led government - should end this year, as most borrowers would have repaid hire-purchase loans in connection with the programme.
As a result, consumer purchasing power and the ability to repay debt will increase, driving spending via credit cards and the taking out of new personal loans. The improved capacity to repay debt will in turn bring down non-performing loans, he said.
"The government's measures aimed at boosting spending are also a [positive] challenge for business growth this year," the group head suggested.