Bangkok: Krungsri Consumer revealed that the credit card and personal loan business is slowing, with retail loan growth impacted by multiple pressures. The fragile economy has led consumers to tighten their belts and reduce frivolous expenses, suggesting a minimum pay of 8% remains appropriate. In the first half of 2025, card spending reached 191.4 billion baht, with new loans at 45.4 billion baht and outstanding loans at 136 billion baht. The company emphasized cautious business practices for the remainder of the year.
According to Thai News Agency, Mr. Athit Ruchirawat, Chief Executive Officer of Krungsri Consumer and President of the Credit Card Business Club of the Thai Bankers' Association, noted that the economic outlook for this year is expected to slow due to factors including high household debt to GDP ratio, domestic political situations, and international developments like US retaliatory tariffs impacting exports. These factors contribute to a potential contraction in the credit card business, with financial institutions likely to tighten credit approval procedures to manage risk. Meanwhile, consumers are becoming more cautious in their spending, leading businesses to quickly adapt.
Access to credit from financial institutions remains a significant challenge. High household debt, related interest rates, and government control measures add complexity to lending practices. Discussions with the Bank of Thailand and the Credit Card Business Association are ongoing to address these issues. Mr. Athip Silpajikarn, Managing Director of Ayudhya Capital Services Co., Ltd. and President of the Personal Loan Club under the Thai Bankers' Association, stated that the economic slowdown and high household debt have contributed to a contraction in the personal loan business. Consumers are increasingly cautious, opting for monthly installments to maintain liquidity and avoid defaults, which indicates improved debt quality.
The Personal Loan Club is working with the Bank of Thailand on debt relief measures, though reaching customers remains challenging. Personal loans are closely monitored to prevent further household debt increases, with adjustments to criteria dependent on the situation. Data from Krungsri Consumer, which includes several credit card brands, shows high-income customers generate over 40% of total card spending. However, spending behavior is shifting across all groups towards necessities and long-term planning, such as insurance, online shopping, and vehicle decoration.
In the first half of 2025, Krungsri Consumer's performance outperformed the market, with a lower-than-average ratio of debt overdue for more than 90 days due to rigorous risk management. Facing challenges in the second half of the year, Krungsri Consumer is adjusting its strategy to focus on quality growth and operational efficiency, utilizing data analytics and AI technology in marketing to better reach and understand customers. The company is refining product benefits to meet customer needs, encouraging primary card use for daily spending, and aiming to expand its customer base continuously.