Commercial banks' lending grows 13.2% in first quarter

Anupap Kuvinichkul, senior director of the Financial Institutions Strategy Department at the Bank of Thailand, said business credit, which accounted for 69.9 per cent of the total, grew by 10.4 per cent in the first three months of this year. That level of growth was down slightly from a year earlier partly because large operators were turning more to debt and equity instruments for fund mobilisation. 

Credit to small and medium-sized enterprises, which amounted to 36.7 per cent of business credit, rose 16.2 per cent. Credit extension was seen in the commerce, manufacturing, property and utility sectors. Consumer credit, which accounted for 30.1 per cent of the total, expanded 20 per cent over the first quarter of last year. 

Outstanding non-performing loans rose slightly from the previous quarter to Bt256 billion. 

Outstanding special mention loans were Bt251.2 billion.

Given likely economic fluctuations, commercial banks set aside more provisions to 158.9 per cent of requirements. 

Despite satisfactory credit growth, commercial banks saw a drop in net interest margin to 2.49 per cent because of high competition in the consumer-loan segment.

Commercial banks’ net profit totalled Bt52.3 billion in the first quarter of 2013, up 33.5 per cent from the prior quarter. Return on assets was 1.4 per cent. 

Their overall capital adequacy ratio was 15.8 per cent, according to Basel III requirements.

Meanwhile, the Thai Life Assurance Association revealed that life-insurance premiums grew by 20 per cent year on year to about Bt109.5 billion in the first quarter, higher than the association’s whole-year target of 17.3-per-cent growth. First-year premiums reached Bt38.3 billion in the quarter.

The association attributed the growth to better consumer understanding of the insurance business as well as the expansion of channels for accessing insurance service. 

The people are also more interested in insuring their health, which coincides with the worldwide trend to longer life spans.