Kasikornbank (KBank) has chosen to reduce the speed of its digital personal loan business to refine its operational model, aiming to better supervise the quality of its loan products.
CEO Kattiya Indaravijaya stated that the bank scaled back the provision of digital personal loans last year through the K-Plus mobile banking app as part of its strategy to enhance its operational model. Specifically, KBank is working on enhancing its credit scoring and risk management systems to uplift the asset quality of its digital loan services.
Ms. Kattiya mentioned that there is no fixed timeline set for improving the business model. However, KBank intends to resume loan expansion once it feels prepared.
KBank, the third-largest bank in the country by total assets, holds the top spot in mobile banking services with approximately 22 million users on the K-Plus platform.
The reduced pace of expanding digital personal loans is not anticipated to greatly impact the bank’s overall loan growth trend, as digital loans represent a relatively small portion of its total loan portfolio. Moreover, KBank’s digital loan services available through the Line BK platform show promising potential.
KBank’s goal is to achieve a total loan growth of 3-5% this year. In the first quarter, the bank saw a quarterly loan growth of 2.15%, although it decreased by 0.19% year-on-year.
Tana Pothikamjorn, CEO of Kasikorn Line operating Line BK, highlighted that the company has enhanced its asset quality over the past two years by refining its operational model. Through the utilization of machine learning and artificial intelligence, the company has improved operational efficiency, particularly in risk management and asset quality control.
Line BK, a social banking platform collaboration between KBank and Line Corporation, lowered non-performing loans to 4% of the total loan portfolio, marking a significant improvement from previous levels. With stricter risk management practices, Line BK has become more selective in its loan assessment criteria and approval processes, resulting in a decrease in approval rates.
Prioritizing asset quality above loan expansion, the company maintained its total loan portfolio around 20 billion baht in the first quarter of this year. The stagnant growth rate was partly attributed to the short-term nature of digital loan services.
Mr. Tana noted, “While the company did not experience significant growth in its loan portfolio, we remain dedicated to serving underserved sectors such as self-employed individuals, freelancers, and farmers, ensuring they have suitable access to financial resources.”
