The seven enterprises in question operate subject to a policy drawn up two years ago by the military-led government, which established the State Enterprises Policy Commission – or Superboard – to oversee their rehabilitation plans.
Since the beginning of last year, SME Bank has outperformed in terms of making a profit and achieving efficiency, said Mongkol Leelatham, president of the bank.
Prime Minister Prayut Chan-o-cha told the bank at a state-enterprises policy committees meeting last Wednesday to propose a five-year plan and a 2017 business plan to the subcommittee on screening and rehabilitating state enterprises by on Tuesday, he said.
“If we can keep up our performance in terms of the quality of borrowers and new lending, SEPO [State Enterprise Policy Office] will allow the bank to exit the rehabilitation plan, and we will run the bank under the Finance Ministry, as before,” he added. SME Bank will be more flexible in doing business if it can exit from the rehab plan, which the bank believes it will be able to do so because the state-enterprise policy commissioners agree that it can achieve the targets set for it, Mongkol explained.
Under the Superboard’s resolution on December 17, 2014, SME Bank has to change the way it supports SME customers by focusing more on small SMEs that require a credit line of no more than Bt15 million, while its new non-performing loans (NPLs) must not exceed 5 per cent.
Mongkol said new NPLs resulting from loans provided during 2015 and so far this year stood at 1.89 per cent, while gross NPLs at the bank as of the end of September totalled Bt18.98 billion, representing 20.66 per cent of outstanding lending.
The level of gross NPLs had improved from Bt23.45 billion at the end of last year, and Bt31.96 billion at the end of 2014.
The bank’s chief said that under the 2016 business plan proposed to SEPO, it would provide new loans totalling Bt35 billion and its gross NPLs would not exceed Bt18 billion by the year’s end.
“We believe that we can achieve the targets, as the new loans that we have provided during 2015-16 total Bt57 billion, and the rate of new NPLs is only 1.89 per cent,” he said.
As of September 30, SME Bank had this year provided new lending of Bt26.25 billion, of which Bt24 billion was for small SMEs with a credit line of no more than Bt15 million per business.
The prime minister on Wednesday also instructed SME Bank to carry out three policies.
Firstly, the bank should help SMEs that are unable to access funds, even though this customer segment is high-risk.
Second, the bank should think about how to improve its human resources for sustainable growth and creating trust and good governance in the organisation.
Third, it should create a bank culture among employees, making them aware they are owners of the bank, and the bank should apply the sufficiency-economy theory for progress in the organisation, the PM said.