KTB Leasing posts 200% profit growth on higher margins

       KTB Leasing showed net profit growth of 200% in the first half of the year,thanks to rising interest margins as a result of good funding cost management.
       President Phinyavat Chantrakantanond said the company posted a net profit of 95 million baht for the first half, compared to 30 million in the same period last year, a growth rate of 216%.
       The Krung Thai Bank affiliate projects 2009 net profits of around 200 million baht, higher than the existing target of 150 million. Last year, net profit was 50 million.
       He said profit gains were partly supported by higher interest income due to efficient cost management. The company's net interest margin in the second quarter was around 7%, an increase from 5.2% at the end of last year. The company expects to maintain the high margin throughout this year.
       Funding for the leasing firm is supported by Krung Thai Bank.
       The average interest rate KTB Leasing charges is around 10% per year. Hirepurchase loans for consumer goods are 20% its portfolio, lower than the industry average of 24-26%. Consumer and auto loans represent 60% of total outstanding loans at 13 billion baht.
       The leasing firm aims to expand outstanding loans to 15 billion baht by the end of the year, despite lower-thantargeted loan growth for the first half of the year. KTB Leasing had new loans of 2 billion baht for the first six months and has a full-year target of 7 billion.Dwindling loan demand and the company's tightening of loan approvals were key factors.
       "Hopefully, we will meet our loan growth target for this year if the country's economy keeps improving. Loan growth from June has been better, while the company has controlled distressed debts at a satisfactory level," he said.
       Non-performing loans were 2.6% of total outstanding loans, and that number should fall to 2% by the end of the year.