SCB might raise 2012 target for new loans
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Siam Commercial Bank could revise its 2012 lending target upward in light of higher-than-expected loan growth in the first quarter and the bright outlook for capital expenditure by companies over the rest of the year.
SCB posted strong loan growth of 20 per cent in the first three months, well above its target of 12-14 per cent for the full year.
The bank will review the target again at the end of first half, president Kannikar Chalitaporn said yesterday.
While she is confident loan growth over the year will exceed the current target, she said it was too early to say whether SCB will revise it upward as it needed first to see loan performance during the whole of the first six months.
The banking industry posted loan growth of 13 per cent in the first quarter compared with the same period last year, as it continued to support the country’s economic expansion.
The International Monetary Fund last week forecast that the economy would grow by 7 per cent this year, she said.
Thai business is investing again this year after effectively having suspended investment over the past two years, Kannikar said, adding that the new cycle of capital expenditure is an indicator for loan growth in the banking sector.
SCB believes it can accommodate the expected continuation of the surge in new lending, despite the fact that competition among banks over deposit mobilisation is certain to intensify, she said.
Despite global economic instability, it is important to support the continued growth of the Thai economy, she said, adding that inflation at 3 per cent is acceptable even if oil prices are surging.
Businesses flexible
The bank chief said Thai businesses had adjusted well following the flood crisis in the final quarter of last year. This flexibility augurs well in terms of how they respond to future problems and rise to challenges.
Meanwhile, the bank has appointed the head of its overseas branches to prepare SCB’s focus on the Asean market in light of the implementation of the Asean Economic Community in 2015.
The plan to set up a representative office in Myanmar is expected to be completed by year-end, she said.
“We are applying to the Central Bank of Myanmar for a commercial-banking licence, after re-ceiving a representative-office licence, as the long-term goal is to open branches and offer financial services to facilitate clients’ businesses and investment with full effectiveness in the country,” said Kannikar.
SCB senior executive vice president Sirichai Sombutsiri said the bank’s plan to be among the top three SME banking leaders, with Bt300 billion in outstanding loans by the end of 2013, could materialise sooner than expected, given its outstanding performance in the segment over the first four months of the year.
“We provided new loans of Bt20 billion [to small and medium-sized enterprises] in the first four months, against a [full-year] new-loan projection of Bt45 billion; 60 per cent of the new loans were for refinancing, and 40 per cent were for current customers,” he said.
Outstanding SME lending this year is expected to reach Bt280 billion, which means the goal of Bt300 billion could be reached by the middle of next year, he added.
