Loan terms will ease as economy improves

       Better economic signs would make accessing credit easier for consumers as restrictions on loan approvals would ease, said Isara Wongrung, managing director of Kasikorn Leasing.
       Financial institutions, including Kasikorn Leasing, would relax tight loan conditions if the economy starts improving,he said. However, the relief would not cover falling interest rates for auto hire purchase loans which are a result of the current strong competition.
       The company charges an annual flat rate of 2.65% for a new car, while the bank's average margin is around 2%.
       Improving economic signs partly led to a reduction in non-performing loans from 2.26% of total outstanding loans in June to 2.1% at the end of last month.The firm expected its distressed debts to be on target at 2% by the year-end.
       Kasikornbank's leasing company hopes positive factors will support its loan growth target this year. It aimed to grow 2009 new loans to 30 billion baht after it booked loan growth of 17 billion for the first seven months. The company expects to boost total outstanding loans to 42 billion baht by the end of this year,with 38.5 billion made in the first half.
       The company's loan expansion has been better, with outstanding loans rising to 39.1 billion baht in July and expected to hit 40 billion this month. Despite a projected drop in car sales this year, the sector should improve in the second half, he said.
       Kasikorn Research Center forecast second-half car sales of 230,000-250,000 units, a slight improvement from the first half. For the first six months of the year,230,000 units were sold, a 28%year-on-year decline.