Tisco slashes loan growth forecast to 3-4%
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Thailand's loan growth is likely to fall to 3-4 per cent against an increase in non-performing loans which may exceed the 2009 level, said Tisco Securities.
In a research note, it said that the poor outlook led to another round of cut in listed banks' earnings forecasts for 2015 and 2016.
In the previous forecast released last month, loan growth was expected to hit 4-7 per cent. The house attributed the further cut to weaker-than-expected global demand, weak agricultural crops prices and delayed elections. In this scenario, the NPL could rise to 2-2.2 per cent in 2015 and 2016, against 1.8 per cent in 2009, 0.9 per cent during 2010-2013 and 1.2 per cent in 2014.
It added that there is a limited chance that the forecasts would be raised in light of sluggish economic condition. Total returns from the banking stock are expected to range from minus 5 per cent to a 7-per cent growth rate.
"Thai banks would perform worse than the market and foreign banks due to the NPL risks and lower dividends," it said.
