Krungsri eases car loan debt

Krungsri Auto, a car lending unit of Bank of Ayudhya, has helped many customers exit debt relief measures, with those remaining in the program accounting for 5.5% of total customers.

Some 650,000 car loan customers have applied for debt relief under the Bank of Thailand’s debt relief program, which started in March.

As part of the financial relief measures providing for the suspension of principal and interest payments, as well as a 30% reduction in monthly payments, they have eased the financial burdens of borrowers.

Some customers who could not repay their debts normally remain in the debt relief program for the second phase, said Kittiya Srisanit, head of Krungsri Auto Group.

Debt serviceability of customers continued to improve as the government eased the lockdown, allowing businesses to resume operations.

The share of clients remaining in the debt relief program is 5.5% of total clients, Ms Kittiya said.

The second phase is due to expire at the end of this year, according to central bank regulations. If customers cannot repay their debts after the program expires, Krungsri Auto can continue to provide financial assistance to customers on a case-by-case basis, she said.

“We expect borrowers participating in the program to strive to exit in line with the gradual economic recovery. We also expect auto loan growth to pick up slightly in this quarter compared to the third quarter.” , Ms. Kittiya said.

Krungsri Auto will continue to monitor debt relief program customers before determining how many will exit at the end of the year.

Although affected by the pandemic, the company maintained its business target for 2020 with a growth projection of 7% for auto loans and non-performing loans representing no more than 2% of the total.

The bank is not concerned about new entrants into the auto title lending segment as it will provide more alternatives to car buyers, she said.

Krungsri Auto does not plan to adopt a pricing strategy, instead focusing on service quality and the digital platform to meet customer needs, Ms Kittiya said.

Krungsri Auto recorded the value of new loans at 263 billion baht, down 18% year-on-year in the first half. Total outstanding loans stood at 429 billion baht, up 13% year-on-year.

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