Banks in Laos expect growth in asset value to continue
THE VALUE of assets in the banking sector in Laos could continue to grow this year as foreign banks open subsidiaries in the country.
An official working in the banking sector commented on the matter after the World Bank reported recently that the value of assets held by banks in Laos reached US$12 billion (Bt423 billion) in 2015, an increase of 60 per cent compared with 2013.
The growth of asset value in the banking sector is partially attributable to the opening of subsidiary foreign banks from Thailand, China, Malaysia, Cambodia, Vietnam and France.
Laos has more than 40 banks, and saw the assets of foreign banks’ subsidiaries increase by 18 per cent in 2013 and then a further 26 per cent in 2015.
The assets of state banks have been reduced from 53 per cent to 46 per cent of the total, which were able to cover 47 per cent of total loans last year.
Last year, the Bank of the Lao PDR issued regulations to help expand the provision of credit through decreasing the interest rate from 5 per cent to 4.5 per cent per annum.
The rate of interest on deposits and loans dropped from 13 per cent in 2014 to 10 per cent in 2015.
This drove the proportion of total deposits held by banks in kip down from 25 per cent in June to 18 per cent in December last year.
In 2015, commercial banks increased their lending by 20 per cent to the industry, trade and agriculture sectors. However, loans in the construction sector declined as the government stressed better payment management.
