TTB draws a goal to take Thai people from debt-free to wealthy.
“TTB wants to be the spark in helping debtors. If TTB can create discipline in Thai people, I believe that the whole market will turn to pay attention and do the same, which will ultimately benefit Thailand as well.”
Amidst Thailand’s household debt situation that is higher than 80% of GDP, one bank that has always been prominent and serious about helping customers solve their debts is TMB Thanachart Bank or TTB, which has announced 2568 as the “Year of Debtor Assistance” to improve the financial lives of Thai people.
With the goals set Jareon Jiarathanakanon, Group President, Retail Credit Product Management, TMB Thanachart Bank (TTB) and Managing Director, TTB Consumer Co., Ltd. Responsible for overseeing the home loan business, including credit cards and personal loans, he is one of the key individuals who will lead TTB to its set goals.
Jareon Jiaratanakanon graduated with a Bachelor of Engineering from Chulalongkorn University and a Master of Engineering from the University of Wisconsin – Madison. He entered the banking industry by working for Standard Chartered Bank in Thailand for 12 years before moving to TTB for 9 years. He has been responsible for retail businesses all along and also looked after the SME business for a period of time.
If comparing the current banking industry with the previous era, Jareon said that the era of financial institutions has changed and is always adapting. Banks in Thailand, in particular, have been adapting all the time and have survived every situation, such as COVID-19, which the Thai financial system has been able to survive well. Part of the reason is that lessons from the 2540 crisis have helped banks in Thailand become strong because they have been through many ups and downs.
The current era of banks has changed. From competing to open branches, it has turned into competing to close them and move to digital. From the paper era, it has become the AI era where every bank, including TTB itself, has gone to learn about AI and applied it to gain maximum benefit.
However, in the near future, there will be a new player, namely Virtual Bank, which will encourage banks to be alert and not stop developing because there will be more competitors and ultimately it will be good for the market to grow more.
The banking sector must grow along with the country's economy. If the country's economy is good, the banks will be good. If the country's economy is bad, the banks will be tired. TTB wants to help push the country's economy as much as possible, and this is the biggest challenge. However, if the banks cannot help push the economy forward, the banks will be tired as well. In particular, household debt is one of the issues that the banks must help solve in order for the country's economy to move forward.
“In the current situation where it seems like banks are not lending, they are still lending, but they are lending with caution because banks have to balance growth and risk. If banks take too much risk and lend beyond their means, it will make the country’s economy worse.”
The MEANINGFUL Change
Help improve your financial life
Jaroen said that TTB divides its care into loan business groups: car loans, retail loans including home loans, personal loans and credit cards, business customer loans and the Wealth business group that deals with deposits and investments.
For 2568, TTB announced The MEANINGFUL Change strategy to continue its goal of making “customers’ financial lives better and better sustainably”, believing that if the bank can understand its customers’ needs, it will be able to find solutions that meet their needs sustainably.
In terms of the retail lending business under its supervision, Jareon said that it is clear that one of the customers’ problems is “debt”. In the past, the bank has helped many customers with debt, and has been helping continuously and will continue to do so.
TTB is one of the banks that prioritizes debt consolidation. It started its debt consolidation project during COVID-19 and has been promoting it more since then. It has been quite successful to date. The number of customers using the debt consolidation service with home loans from 2564 to April 2568 is 9,000, with a credit limit of approximately 8,500 billion baht, which has helped customers save more than 2,000 billion baht in interest.
“Debt consolidation can help people who have experienced financial problems to survive again. The key to debt consolidation is to reduce the interest burden as much as possible because interest is the biggest debt burden.”
Jareon said that some debtors have multiple debts, and may have debts with high interest rates, such as 25%, but if they consolidate their debts into a secured loan, such as a home, the interest rate will be reduced to around 5-6%. The principle of debt resolution is that if the interest burden can be reduced, debt resolution can be achieved.”
“But above all, customers must understand the first thing: “must have good financial discipline” because even if debts are consolidated, if more debts are created, the debt problem will not end and will return to the same old cycle.”
However, one of the successes of debt consolidation is helping customers have better financial discipline. After customers consolidate their debts with the bank, they go back and look to see whether this group of customers' debts have increased or decreased. It was found that more than half had decreased debts. This is considered to be on the right track and can really help solve debt problems. But there are still some whose debts have increased, which
The bank must continue to help him solve this problem so that he can reduce his debt again.
“Debt consolidation is one solution. A large group of customers who use debt consolidation with TTB have found that they can really get by. However, there is another group that cannot continue and must use additional debt restructuring methods to help solve their debt problems. However, the most important thing that customers will receive when they move to TTB is a significant reduction in interest burden and a lower monthly installment, which is considered a level of assistance.”
Moving forward from debt consolidation to paying customers with good installments
Let the interest rate reflect the risk
The juror said that the debt consolidation machinery that TTB had started was already moving forward. From now on, they will try to bring in as many customers as possible. At the same time, there is another group of debtors that no one has ever mentioned, which is the “good repayment group”, but this group has not received much help.
For TTB, we believe that what will help this group of customers is to provide risk-based pricing, with the ultimate goal of helping them pay off their debts faster. In addition, if we can help disciplined customers pay off their debts faster, it will also benefit the bank itself because the bank wants to have a disciplined customer base in its portfolio. When we can help customers, the bank’s loan portfolio will grow with quality. It can also help with household debt in Thailand.
“TTB wants to be the spark in helping debtors. If TTB can create discipline in Thai people, I believe that the whole market will turn to pay attention and do the same, which will ultimately benefit Thailand as well.”
Jareon added that debtors who make good payments tend to prioritize their credit and try to make regular payments on time. Under the “Good Payment…with Prizes” program, TTB will focus on loan customers who own cars, houses, and salaried employees. For example, if customers have a good payment history, they will receive a refinancing offer at a low interest rate and in the fourth year, the interest rate will not increase. In addition, they will also receive rewards such as interest discounts or other special privileges.
For the “Pay Dee Mee Rung” project, the bank has set a target of having 10,000 billion baht in home refinancing loans, 5,000 billion baht in car loans, and another 5,000 billion baht in personal loans. In total, TTB’s target for the “Pay Dee Mee Rung” group in 2568 is 20,000 billion baht, which includes both customers from other banks and existing TTB customers who can join the project if they meet the conditions.
The “Good Installment…with Prizes” project has been in operation since April 2568. In May, there was an increase in the number of applications, especially for refinancing home loans, which had the highest number of applications in several years.
“Many people are interested, but not everyone meets the conditions of the good installment with prizes. This reflects that people are starting to be more aware of reducing their debt burden. Because income is difficult to increase, reducing debt burden may help more. Because if the burden can be reduced, people will have more liquidity, so they don’t have to borrow more.”
“TTB’s ultimate goal is to truly improve the financial life of its customers, which is to go from debt-free to wealthy. This may be a long way off, but the results we have seen so far are that customers have reduced their debts, are no longer creating more debts, and are starting to save money.”
Jaree said that TTB's goal is not to focus on market share, but to create something that will affect the market as a whole. And with the current size of TTB's total loan portfolio, it is large enough to create a ripple effect in the market when new products are launched, such as debt consolidation, people will remember that TTB is the leader, as well as home refinancing.
TTB's homework in 2568 is to create recognition about "Good installments...with prizes", which has just begun and still needs a lot of work to make people understand. Because it must be admitted that when compared to other countries, most Thais may not understand XNUMX percent about refinancing, especially personal loans, which take time to become familiar with.
However, the group of customers who are most affected, TTB has helped to some extent with the debt consolidation program, but the group that can still pay installments and has good discipline, still has homework to find a way to reach customers, such as the personal loan market worth 600,000 billion baht, it was found that there are many who still do not know that they can reduce their interest burden to be lower than before.
“We have reached problem customers, but we have not reached good customers yet. It is a difficult homework. We need to try and make mistakes for a while to let customers see the benefits of refinancing, both personal loans and car loans, which are ways to reduce interest burdens.”
Jaree said that he wanted people to think of TTB as the first bank in their minds when it comes to personal loan refinancing, just like what happened with home loan refinancing. Similarly, car loan refinancing, which is still not very well-known in the market, he wanted people to know more about it.
However, for the group of customers who are in trouble, in addition to the debt consolidation project, there is also the You Fight, We Help project, in which TTB has deployed personnel to help customers enter the project, with a debt value of more than 27,000 billion baht and more than 40,000 cases.
“TTB’s ultimate goal is to truly improve the financial life of its customers, which is to go from debt-free to wealthy. This may be a long way off, but the results we have seen so far are that customers have reduced their debts, are no longer creating more debts, and are starting to save money.”
Aim to expand customer base
Car-House-Salaryman
In addition to aiming to become a bank that excels in refinancing, for finding more customers than the current ones, Jare said that he will focus on the bank's existing customer base of more than 5 million people, and of this number, not all of them have used the bank's products, such as customers with houses, which number around 5, but this group may not have used TTB's home loan products, or customers with cars, which number around 2.4 million, of which about 1 million are using loans with the bank.
“If the bank can expand its home and car customer base to use the bank’s products more, it will be large enough to create growth. TTB will still focus on the main target group, which is the current customer group with homes, cars, and salaried employees.”
Jaree also said that in 2568, TTB will start to penetrate the credit card and debit card market by collaborating with “Disney”, a global partner, which is the first and only bank in Thailand that has the TTB All Free Disney debit card and the TTB Disney credit card, which is creating something new and colorful in the market.
“The credit card market has slowed down for a while, partly due to cautious spending. The high-income group is still growing, but the middle-income group is starting to slow down because people are trying to cut expenses. But for TTB, it is still growing because of the Disney credit card, which helps increase the new customer base.”
TTB has a target of issuing new credit and debit cards in 2568, with 100,000 Disney credit cards and 300,000 credit cards in total, while the target is 216,000 Disney debit cards and 725,000 debit cards in total.
Follow and read other columns in the Finance and Banking Journal, July 2568 issue, issue 519, in digital format: https://goo.gl/U6OnIi
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