CIMB Thai Bank's (CIMBT) retail loan growth for the first half was on target, while the expansion of its commercial loan business remained sluggish, a senior official says.
The bank managed to lend 79 billion baht worth of retail loans for the first six months to June, up 5-6% from the end of last year, its senior executive vice-president Adisorn Sermchaiwong said, noting that the bank was aiming for a 10% growth in its retail loans this year.
Of the 79 billion baht, mortgages amounted to 67 billion and unsecured loans -- credit card and personal loan -- accounted for the rest.
The bank largely focuses on mid-to-upper income earner who purchase homes in the range of 3-5 million baht each, making this market segment promising despite concerns about oversupply in the property market.
The bank has managed to reduce the non-performing loan (NPL) ratio of its retail banking business to 3.4% from 4% at the end of March due to NPLs' divestment, Mr Adisorn said.
Amid growing concerns about oversupply in the property market and swelling household debts, the bank has adjusted its strategy for retail loan business by focusing on mid-to-upper income customers over the past two years.
"We expect a stronger competition in mortgage lending in the second half because of a positive growth in its demand and a decline in demand for other loan products, with the low interest rates also playing a role in attracting homebuyers," he said.
CIMB has extended a promotional campaign for mortgage loans offering a special interest rate of 3.33% per year for the first three years until the end of this year, he said.
Mr Adisorn added that the bank was targeting a new customer group, which it dubbed as Victor for their drive to follow their dreams.
Initially, the bank plans to concentrate on the Victor group for wealth management business, and the Preferred group, whose minimum asset under management stands at one million baht each.
It expects to increase number of its Preferred customers to 77,000 with a total AUM of 220 billion baht by the end of the year from around 60,000 clients with a combined AUM of 200 billion baht at the moment.
CIMBT's shares rose by 0.9% to close on the Stock Exchange of Thailand (SET) at 1.08 baht with a turnover of 1.7 million baht yesterday.