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SCB steps up loan target    
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Siam Commercial Bank has revised up its loan growth target for this year, thanks to stronger demand in line with healthy growth in the country's economy, said president Kannikar Chalitaporn.

The bank now expects lending to expand by 15% this year, up from a previous target at 10-12%, after it booked dramatic growth of 20.1% in the first quarter.

The expansion in loans in the first quarter was due partly to the low base in the first quarter last year. Thailand's economic expansion, as well the bank's strategies for all business segments including corporate, small and medium enterprise, and retail banking have been supporting loan growth, she said.

Despite the brisk loan growth, the bank's net interest margin (NIM) for the first quarter was 3.14%, slightly below the target of 3.2%, in line with falling margins of the banking industry overall.

Higher funding costs linked to rising interest rates have kept banks' margins slim, so SCB plans to increase non-interest income in order to maintain its profitability, said Mrs Kannikar.

She said the bank expected to increase fee-based income to 45% of its total by the end of the year from above 40% now. The corporate and SME segments would contribute substantial fee income, but consumer banking is expected to generate marginal fees because of strong competition and an adjustment in the fee structure of ATM transactions.

Banks began a phased adjustment of ATM fees late last year under pressure from the Finance Ministry and the Bank of Thailand, and the changes will be completed within this month.

"The adjustment in ATM fees has affected the fee income of the retail banking business, but we continued to show good growth of 20.8% in the first quarter, supported by the wholesale and SME segment," she added.

SCB has a total loan portfolio of 1.07 trillion baht.

SCB shares closed yesterday on the SET at 113.50 baht, down 1.50, in trade worth 510.5 million baht.

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