Bank Loans Set To Drop Next Year, Says Bot
Thursday, 11 December, 2008
Loans extended by the country's commercial banks are expected to grow at a slower pace as a result of the current economic slowdown and bank reluctance to lend due to fears of possible bad credit loans, according to the Bank of Thailand (BoT).
BoT's Deputy Governor Bandid Nijathaworn said Wednesday that the overall volume of loans provided by commercial banks in October expanded 11-13 per cent from the same month last year.
Corporate business loans grew 12 per cent and consumer loans expanded 15 per cent while credit card and personal loans enjoyed a slow growth of 5.1 and 8.5 per cent respectively.
The credit card and personal loan expansion has declined since banks are more careful in extending both kinds of loans thanks to the economic slowdown.
"To date, the central bank has already monitored repayment competence of debtors. It is considered a challenge to commercial banks' performance management," he said.
However, Mr. Bandid predicted that overall loans next year would grow at a slower pace due to two factors, reduced demand and increased selectively.
The demand for loans in the business sector had dropped in parallel with the sluggish economy, Mr. Bandid said, while at the same time commercial banks are more selective in lending because they are worried about re-entry and new non-performing loans. (TNA)
Source : http://enews.mcot.net/