Board & Managements

To Shareholders,

In the past year, global economy transformed through geopolitical tensions across various countries and continued to cause instability in this year. Thailand’s economy grew slightly by 2.5% lagging behind other nations in the region. The growth was driven by tourism, export recovery, and fiscal stimulus measures but consumer confidence remained weak due to higher living costs and household debts which tighten lending curbed outstanding and caused uneven economic rebound.  

Bank of Thailand cut the policy rate to 2.25% in October 2024 and to 2.00% in February 2025 to stimulus the spending.  The consumer loan market faced contraction, especially in personal loans, credit card and auto loans with the rate 3-5%.

Amid these opportunities and challenges, we adjusted the strategies, balancing growth with prudent risk management. We tapped into a new customer segment- the young generation-through the successful launch of our AEON PRiMO Digital Credit Card in November 2024, designed to align with their purchasing behavior.  While the auto loan market struggled and lenders grew cautious, we took an opportunity to gain more market share with controlled risk exposure, making our used car hire purchase and title Loan portfolios.

Early in the 1Q2024, NPLs saw a modest increase, partly reflecting the transition period following increased the minimum credit card payment rate from 5% to 8%, though it was temporarily impacted the customer’s payment.   We have supported customers by offering restructuring programs and improved collection process, causing NPLs declined in the second half of the year.  Despite this, asset quality and credit costs steadily improved, reflecting our proactive efforts in collection performance and participation in the Bank of Thailand’s ‘You Fight, We Help’ initiative.  Lastly, we successfully expanded our fee-based income streams, resulting in increasing of bad debt recovery by 14.3% from the previous year, reducing reliance on interest revenue and strengthening our business for long-term sustainability.

The Thai economy is set to gain momentum in 2025, driven by private consumption, tourism, and fiscal stimulus measures. We are looking towards the possibility of achieving the plan’s financial targets by growth in high profit areas and maintaining disciplined of cost management and asset quality. Recognizing these challenges, we developed strategic initiatives and drive sustainable growth in the coming year.

Building on the lessons and challenges of 2024, our strategic focus for 2025 will accelerate digital adoption to attract younger generation customers, leveraging the AEON Thai Mobile app to enhance accessibility and engagement.  In parallel, we will also continue expanding our hire purchase and title loan portfolio and strengthen fee-based income streams to reduce reliance on interest revenue.  To enhance asset quality, we will intensify NPL reduction efforts and refine recovery strategies.  Additionally, we will scale AI-driven credit scoring to optimize lending decisions and serve customers’ need.  As part of our commitment to innovation, we will modernize customer engagement, revamping branch operations and transforming our flagship Theatre at Siam Paragon to create a more seamless and interactive experience.  Lastly, we are committed to advancing ESG and sustainable finance initiatives by leveraging our 500 MB sustainability loan to promote responsible lending and financial inclusion.  This approach ensures that our growth remains both inclusive and aligned with long-term sustainability objectives.  Additionally, we have recently received the carbon footprint certification in November 2024, from the Thailand Greenhouse Gas Management Organization (TGO), a public organization.  It highlights our dedication to environmental responsibility, underscoring our commitment to sustainability.

As we move into 2025, we are prepared to navigate challenges and seize new opportunities with confidence.  With a clear strategy and strong execution, we will continue driving sustainable growth.  I sincerely thank our employees for their dedication and our shareholders, customers and partners for their trust and support.  Together, we will move forward, strengthening our business and making a positive impact on society and the economy.

Toshiya Shimakata
Vice Chairman of the Board and Managing Director