Muangthai Leasing Plc (MTLS), a SET-listed provider of car title loans and personal loans, expects annual loan growth of over 40% this year and next, driven by a nationwide network expansion.
The expansion aims to increase the network to 4,000 branches in 2020 from 2,500 and is the key driver for the company's three-year plan, said chief executive Chuchat Petaumpai.
MTLS expects to add about 600 new branches each year, with an investment sum of 250,000-800,000 baht per branch.
"Our business, in terms of lending and revenue, is expected to grow by more than 40% during these two years, rising over 30% in the third year," Mr Chuchat said.
"We are confident our growth target is possible and the business will trend upwards for at least three years, supported by government spending on infrastructure development projects and the Eastern Economic Corridor, which should bring more job opportunities for the labourers and farmers who are our customers," he said.
The company expects to provide new loans valued at more than 80 billion baht this year, with revenue projected at above 10 billion baht, he said.
New lending for the first two months this year grew by more than 40%.
Outstanding loans are expected to be about 50 billion baht by year-end, up from 35 billion at the end of last year, Mr Chuchat said.
The company reported interest and dividend income of 6.79 billion baht last year, with a net profit of 2.5 billion baht.
Assistant managing director Parithad Petampai said the company will use lower interest rates and better services to compete with existing personal loan providers.
The industry offers interest rates of 35-38%, while the company offers 15% interest and 8% on expenses.
Mr Parithad said that within the industry, interest for loans may vary depending on demand and supply in each area, but, by contrast, MTLS offers the same rate nationwide.
"Good customers usually select lower interest costs," he said. "This is the reason why our non-performing loans are the industry's lowest at 1.2%, which is lower than our limit of 1.5%."
The company has sufficient loan-loss reserves at 265% and will not suffer under the new International Financial Reporting Standards 9, due to be implemented in Thailand on Jan 1, 2019.
The company will also change its name to Muangthai Capital to avoid investor confusion about its core business.
With the name change, both domestic and foreign investors will be able to clearly identify the company as a loan business, as opposed to a leasing business.
The company will seek approval from an extraordinary general meeting on April 20. Shares are to trade under the symbol MTC.
MTLS shares closed Thursday on the Stock Exchange of Thailand at 40.50 baht, up 25 satang, in trade worth 366.4 million baht.