January 29, 2020 / 10:00 AM / 20 days ago

Top Thai lender Kasikornbank plans $500 million tech investment

BANGKOK, Jan 29 (Reuters) - Thailand’s Kasikornbank Pcl (Kbank) plans to invest 17 billion baht ($517 million) in technology and innovation over the next three years to boost efficiency and increase personal loans, a top executive said on Wednesday.

The plans comes as Thai bank earnings come under pressure from a slowing economy and the elimination of transaction fees.

“Amid a challenging economy and disruptive technologies ... the business must quickly adjust to capture new opportunities,” President Kattiya Indaravijaya, told a news conference.

The central bank now forecasts 2019 economic growth at 2.5%, a five-year low, and 2.8% for this year as exports have slowed.

Kbank, the country’s largest lender by assets, plans to increase consumer lending by 30% or 178 billion baht this year, with more unsecured lending.

In 2020, it is targeting loan growth of 4% to 6%, with retail loans to grow up to 11% and corporate loans to growth 2% to 4%, it said in a statement.

It will roll out its joint venture with chat application, LINE, LINE BK, in the second quarter this year, which will tap into the app’s network of users.

Non-performing loans ratio to loans is expected to increase to between 3.6% to 4% due to a slowing economy, versus 2.45% at the end of 2019.

The bank reported flat net profit growth of 38.7 billion baht in 2019, from the same period a year earlier with fee and service income down 3.61%. ($1 = 30.29 baht) (Reporting by Chayut Setboonsarng; editing by David Evans)

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