Kiatnakin Bank to focus on high-yield loans to boost income

Solid earnings will continue in 2018.

Kiatnakin Bank will focus on loan segments that did well last year including personal loans, micro SME, housing loans, and Lombard loans, Maybank Kim Eng reports. With this, the bank will strengthen its net interest margin, boosting overall net interest income.

Here's more from Maybank Kim Eng:

In 2017, the bank’s loan book expanded by 9.3% and thus aiming for 10% is trying to maintain the growth rate as last year.
10% does not suggest that auto loans will have a bright outlook. In fact, KKP remains cautious on auto loans due to high competition leading to unattractive risk/reward and will focus on segments that did well last year including personal loans (+36% in 2017), micro SME (+84%), housing loans (+205%), and Lombard loans (+62%). Gearing towards high-yield segments will strengthen the bank’s NIM as well, boosting overall net interest income.

Because this high yield segment has a higher credit risk in nature, NPL may rise somewhat and credit cost should increase from the very low level (0.41%).

In conclusion, we see solid earnings should continue this year.