BANGKOK, July 21 (Reuters) - Bank of Ayudhya BAY.BK (BAY), Thailand's fifth-largest lender, said on Tuesday it was on track to achieve its 6 percent loan growth target this year thanks to recent acquisitions.
"The bank's strategy of taking over businesses at a time when the economy is slow will help us show lending growth of 6 percent this year," Chief Executive Tan Kong Khoon told reporters.
Bank of Ayudhya, 33 percent owned by a unit of General Electric (GE.N), showed 3.9 percent growth in lending in the first half, Tan said.
In early July, the bank spent 13.7 billion baht ($403 million) on buying stakes in GE's financial businesses in Thailand from GE Capital. It also bought two consumer finance businesses from American International Group Inc (AIG.N) for 2.06 billion baht in February.
It has an aggressive target of increasing consumer loans to half its lending by 2010. The AIG acquisition boosted its consumer loan portfolio to 36 percent.
Its strong lending contrasts with that of other Thai banks, including number one Bangkok Bank BBL.BK and fourth-ranked Kasikornbank (KBAN.BK). Both reported a fall in loans in the first half of the year.
Bank of Ayudhya reported a 12 percent drop in second-quarter net profit to 1.75 billion baht as rising provisions outweighed higher non-interest income, although that was better than expected. [ID:nBAK000828]
The medium-sized lender wants to limit its gross non-performing loans to around 8.8 percent of lending this year, similar to the end of last year, Tan said.
It aimed to keep its net interest margin at 4.00 percent, on last year's 4.10 percent, he added.
At 0933 GMT, its shares were down 3.41 percent at 17 baht, while the main stock index .SETI was 0.11 percent lower. Investors took profits a day after the stock rose to a 10-month high, dealers said. ($1=34.00 Baht)