State banks to help boost liquidity of specialised lenders
The Government Savings Bank (GSB), Krungthai Bank and the Bank for Agriculture and Agricultural Cooperatives have united to inject liquidity into other specialised state-owned banks.
GSB president Voravit Chailimpamontri, who is also chairman of the group of state-owned banks, said that currently some state-owned banks had to borrow from the interbank market, and the loans came with rigid terms and conditions.
"The three [state-owned] banks are ready to help them. However, our financial help will not be huge. For instance, if they need Bt20 billion, we may be able to lend 30 per cent of that," Voravit said.
While the borrowing banks will pay the same interest as for interbank loans, they will enjoy a longer borrowing term and a higher loan limit.
Some banks, mostly small ones, are experienced tight liquidity, as banks are mobilising funds to get ready for the financing of the government’s infrastructure projects.
Voravit said GSB itself also aimed to extend loans worth Bt100 billion a year in the next seven-year period, when the government may need about Bt300 billion annually to finance the Bt2-trillion infrastructure mega-project.
To get ready for the huge loan demand, in the first nine months of this year, GSB attracted about Bt90 billion in deposits. It expects to pull in Bt130 billion to Bt140 billion by this year-end, up 10-20 per cent over last year, with focus on young savers, who account for half of the bank’s depositors. GSB now has about 25 million accounts.
Voravit said loans and deposits grew in the same direction in the first nine months. In the period, GSB showed net profit of Bt17 billion and is on course to achieve its annualised profit target of Bt21 billion.
GSB yesterday marked the first centennial anniversary, when Thailand commemorated the National Savings Day.
According to Voravit, because of increasing household debt, the bank also needs to watch out for loan quality. The bank’s personal-loan limit has been lowered from 30 times an applicant’s salary to 15-20 times.
Personal loans account for up to 55 per cent of the GSB lending portfolio, or between Bt700 billion and Bt800 billion, from total outstanding loans of Bt1.7 trillion, Voravit said.
