Commercial banks' loan growth dips to 4.3% in first quarter
Affected by the slower-than-expected economic recovery and slow demand for business credit, commercial banks saw combined loan growth of 4.3 per cent year on year in the first quarter, down from the previous quarter's 5-per-cent growth, according to the B
Jaturong Jantarangs, senior director at the BOT, said the slow economic recovery was bound to reduce credit growth and lower credit quality at some level. However, the commercial banking system still has high loan-loss provisions and a good capital base.
In the first quarter, growth of business loans, which accounted for 68.7 per cent of total lending, slowed to 2.9 per cent.
Loans to large enterprises grew by just 1.0 per cent in the quarter, down from 4.6-per-cent growth in the final quarter of 2014. Large enterprises mobilised funds through financial instruments instead of borrowing from commercial banks. Lending to small and medium-sized enterprises saw higher growth, at 4.5 per cent, after slowing down since early 2014.
Consumer loans, which amounted to 31.3 per cent of total lending, expanded by 7.6 per cent, close to the previous quarter’s figure. Hire-purchase loans contracted by 4 per cent year on year.
Overall credit quality was down, mainly in SME and consumer loans.
Outstanding non-performing loans (NPLs) amounted to Bt298.3 billion in the first quarter of this year, up from the previous quarter’s Bt21.1 billion. Total loans accounted for Bt13.0 trillion. The gross ratio of NPLs to total loans rose to 2.29 per cent from 2.15 per cent in the previous quarter. Special mention loans rose to Bt366.2 billion for a ratio of 2.81 per cent, up from 2.61 per cent.
In the first quarter of this year, the commercial banking system registered Bt52.5 billion, close to the same quarter of last year. Its Bank for International Settlements ratio edged down slightly to 16.6 per cent. Its Tier 1 ratio remained steady at 13.7 per cent.
