TBA discusses measures to enhance SME funding access

The Thai Bankers' Association (TBA) is planning to discuss new ways to enhance funding options for retailers and small to medium-sized enterprises (SMEs). This comes in response to the government's requests for banks to speed up loan approvals and lower costs for businesses needing credit. Kattiya Indaravijaya, the CEO of Kasikornbank (KBank), said banks are waiting for more information from the government. They expect discussions to cover support for SME loans, changes to mortgage loan regulations, and the current debt relief program called "You Fight, We Help." The TBA will have a board meeting on Tuesday, which the Finance Minister will attend. The Finance Minister, Pichai Chunhavajira, has noted that the economy is starting to recover, making it a good time to increase loans. KBank is ready to assist existing clients with more credit and debt restructuring but will take a cautious approach with new loans. The bank aims to limit loan growth this year to a flat rate after seeing very slight growth of 0.57% last year. KBank estimates that the ratio of non-performing loans could rise to 3.25% this year, a bit higher than last year. In the first quarter, KBank expects steady loan growth compared to the previous year. The bank sees potential in mortgage and credit card loans but anticipates corporate loan growth may come later in the year. If the Bank of Thailand eases regulations on mortgage loans as property developers want, it could help homebuyers. However, KBank will wait to understand the full impact before proceeding. Kattiya stressed the bank's efforts in helping clients restructure their debts through the relief program. Although the number of participants is below expectations, there has been some improvement. In another announcement, KBank plans to propose a special dividend payment of 2.50 baht per share at a meeting on May 7. Kattiya noted that shareholders are prioritizing returns on investment over just loan growth. The bank is also considering increasing its dividend payout ratio from 25% to 37% in 2024.