Bank of Ayudhya
Thailand’s small and medium-sized enterprise sector was probably not the best business segment to be in over the past 12 months. Several high-profile companies struggled to service or repay their loans, leading to debt restructurings and write-offs at the banks. According to credit ratings agency Standard & Poor’s, the non-performing loan ratio for SMEs rose to 4.63% in 2017 from 4.4% in 2016, and exceeded the NPL ratio of 2.97% for total loans in the banking system.
Bank of Ayudhya, led by chief executive Noriaki Goto, ranks only fifth in the SME lending sphere, but it still packs a fair punch: its SME portfolio has expanded by an average of 12% a year since 2015.
Despite the challenging economic environment, the bank has experienced fewer problems than many of its peers. One reason it stands out from the crowd is because of its innovative range of supply chain and trade finance products. Another is its sophisticated digital platform and ability to harness parent MUFG’s strong global business network to create opportunities for Thai entrepreneurs.
“Leveraging with MUFG’s global network and capabilities, we are in unique position to support Thai corporate customers in their overseas expansion,” says Pornsanong Tuchinda, head of commercial banking at Bank of Ayudhya.
The success of the bank’s supply chain strategy meant that total funding of SME working capital reached Bt27 billion ($814 million) in 2017, up 35% from 2016. The Bangkok lender has also helped SME operators to boost profitability and improve their overall financial performance. This includes a real-time fund-transfer service based on the blockchain interledger technology to shorten the transfer period and reduce costs for customers.