Wednesday, August 05, 2020

Banks’ credit growth seen tumbling through 2019

Oct 05. 2019
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By The Nation

The Kasikorn Research Centre has lowered its forecast for 2019 commercial bank credit growth from 4.5 per cent, valued at Bt13 trillion, to 4 per cent, valued at Bt12.9 trillion.

Despite credit expanding by 4.2 per cent and Bt12.6 million in the second quarter, it said this week, growth tends to decline in the third and final quarters.

With the national economy grinding down, private enterprises including SMEs require less credit, it noted.

Meanwhile corporations with multiple affiliates are supported by investments in bonds, which cost less than the interest on loans. There are currently long-term bonds in corporate hands worth a combined Bt900 billion to Bt1 trillion.

Business loans are expected to shrink by 2.5 per cent this year, well under the previous forecast of 3 per cent.

But the centre still expects retail loans to expand by 6.5 per cent for the full year.

It believes hire-purchase loans will drop to 8 per cent from the 10.2 per cent seen in the second quarter.

House loans will shrink to 4 per cent from 7.8, credit-card loans to 7 per cent from 9.5, and personal loans to 10.5 per cent from 12.1.

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