FRIDAY, March 29, 2024
nationthailand

Exim Bank to ramp up investment credit portfolio

Exim Bank to ramp up investment credit portfolio

THE Export-Import Bank of Thailand targets investment credit accounting for more than half of its loan portfolio within 10 years, up from around 30 per cent currently.

In its 10-year business plan, Exim Bank has laid out its new role to help support the government’s “Thailand 4.0” policy and the 20-year national strategy, said Pisit Serewiwattana, president of the bank.
At a press briefing yesterday, he said the role of Exim Bank should be expanded to provide investment credit to high-potential medium-sized enterprises, as exports may no longer be the main engine driving economic growth.
Several countries have switched from relying on exports for economic growth to focus more on investment, and Thailand is moving the same way. Therefore, the bank will have to concentrate more on investment credit to the 10 target industries the government has identified, including infrastructure and solar energy.
Exim Bank will enhance the ability of Thai enterprises to move their production bases to neighbouring countries for cost efficiency, he said.
The bank has recognised that rising trade barriers have made it more difficult for exporters to do business, while Exim Bank has small exposure in facilitating investment credit. Therefore, under the 10-year plan, investment credit must be grown significantly, he said.
The bank’s investment-credit portfolio is Bt37 billion, one-third of its total loan portfolio of Bt83.17 billion, and it aims to build this proportion to 50-60 per cent within a decade.
Pisit said Exim Bank targeted outstanding loans to stand at Bt384 billion within 10 years. Currently, this specialised financial institution’s outstanding loans amount to around 1 per cent of Thailand’s gross national income, but it wants to increase that contribution to 2.5 per cent of GNI as it believes that it take on the role of investment, trade and insurance guarantor for exporters.
In some countries, export-import banks contribute 4 per cent of GNI, he said.
Moreover, Exim Thailand will strongly promote its role as a provider of export-credit insurance, as only 10 per cent of the country’s 60,000 exporters are currently covered.
In 2016, Exim Bank’s outstanding loans grew by 13 per cent year on year to Bt83.17 billion, and new lending expanded by 24.72 per cent to Bt25.32 billion. The rate of non-performing loans dropped to 3.57 per cent from 5.43 per cent in 2015.
However, the bank’s net profit last year dropped to Bt1.3 billion from Bt1.52 billion in the year before mainly on a reduction of interest rates to help traders.
 

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