Growth in credit at seven-year low in 2016, 

In 2015, the country’s credit expansion was 4.3 per cent.
Assistant BOT governor Somboon Chitphentom also blamed the country’s sluggish economy for a decline in credit quality.
Last year, businesses tended to shun banks and raised more capital through debt instruments and share issues amid low interest rates, he said. 
Business credit, which accounted for 67.4 per cent of total credit, inched up 0.6 per cent last year, low expansion partly due to repayment of debts for acquisitions during the year. 
Credit extended to large businesses excluding financial institutions contracted by more by 1.1 per cent from 2015, partly because of state agencies’ debt repayments. 
However, credit to non-financial small and medium-sized enterprises rose by 1.8 per cent, compared with the previous year’s 5.6-per-cent advance, on contractions in credit for the manufacturing and property sectors. 
Consumer credit, which accounted for 32.6 per cent of total credit, increased by 4.9 per cent, slower than the previous year’s 7.1-per-cent rise. 
Credit for residential purposes, credit-card credit and personal credit expanded by 6.9, 5.9 and 3.8 per cent respectively. Credit for car purchase went up for the second consecutive year, this time by 1.3 per cent. 
Outstanding non-performing loans ended the year at Bt385.7 billion, up Bt48.1 billion from the year before, mostly on rises in NPLs from SMEs. As a result, the proportion of gross NPLs to total loans increased to 2.83 per cent from 2.55 per cent.
Credit quality declined in the commerce, services, property and construction sectors, while consumer credit quality was lower mainly from residential-purpose credit. 
Outstanding special-mention loans at year-end amounted to Bt358 billion, up Bt43.9 billion from the end of 2015. As a result, the ratio of SMs to total loans climbed to 2.63 per cent from 2.38 per cent.
Last year, commercial banks set aside more loan-loss provisions, at Bt528.9 billion, up 19 per cent. As a result, the ratio of actual compared with required provisions increased to 159.6 per cent from the previous year’s 156.3 per cent.
Despite more provisioning, commercial banks’ combined net profit rose by 3.6 per cent from the prior year to Bt199 billion thanks to management of their deposit portfolios, which lowered their interest-payment costs. Their returns on assets remained steady at 1.1 per cent.
Their combined capital base rose to Bt2.36 billion after some of their profits were set aside as the capital base, casing the overall capital adequacy ratio to increase to 18 per cent and Tier 1 ratio 15.1 per cent.