Banking

Banking 

Recovery in loan growth being led by KTB. Loan growth picked up substantially to 1.1% MoM in November from 0.1% MoM in October, driven by corporate, SME, government and housing loans. KTB took the lead in November with a surprise growth of 3.2% MoM; around half of this came from government sector, followed by the retail segment (housing and personal loans). Auto loans continued to contract in November. The sector’s YTD loan growth was 2.8%. We slice 1 percentage point off our sector loan growth forecast to 4% for 2014F (cut loan growth for BBL, TISCO and KKP) and 8% for 2015F (cut SCB to fine tune with its guidance). We expect a further acceleration in loan growth in December due to seasonality. Banks cautiously anticipate a moderate loan growth recovery in 2015F, driven by revival of investment stimulated by infrastructure projects and a recovery in domestic consumption. Auto loan growth is expected to recover only modestly in 2015F due to high repayments of loans extended in 2012-2013