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Baht/$ 34.23/25 (Bid/Ask)
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13,350
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SOMRUEDI BANCHONGDUANG
For the 1.7-trillion-baht megaprojects, KTB expects to provide around half of the total funding raised from the banking sector in 2009, according to Mr Preecha. |
Krung Thai Bank expects to meet its 100-billion-baht loan target to government agencies this year, despite concerns about heightened political risk and slowing economic growth.
Preecha Phukham, the bank's senior executive vice-president, said the bank had already supplied government loans worth 50 billion baht in the year to July and expected accelerated fiscal spending and new infrastructure megaprojects to increase the government's demand for loans over the next few months.
''We believe the country's political uncertainty will not have an impact on the government's financial investment plans this year. Since the beginning of the year, state borrowings have been maintained,'' he said.
KTB is the country's second-largest bank in assets and is majority-controlled by the government. It typically supplies between 40% and 50% of the total loan demand for government projects. Government loans currently account for between 12% and 13% of the bank's total loan portfolio of more than one trillion baht.
Mr Preecha said government spending was critical to help maintain the momentum of economic growth considering low confidence in the private sector.
KTB's government loans include both project financing and consumer loans to civil servants and state enterprises.
Consumer loans are mainly housing loans, which the bank expects to reach 20 billion baht in new lending this year, compared with 15.9 billion in the first seven months of the year. The bank's total mortgage loan portfolio now stands at 149 billion baht.
Mr Preecha said for the 1.7-trillion-baht megaprojects, KTB expects to provide around half of the total funding raised from the banking sector in 2009.
''Pricing will be our key strategy in competing with other financial institutions in project loans,'' he said. ''In any case, as a state-owned bank, KTB will support the government investment projects.''
The megaprojects, which include new projects in water irrigation, health care, education, mass transit and logistics services, will be financed partly through local and overseas bank loans, bond issues, state budget allocations and through public-private partnerships.
According to the Finance Ministry's Public Debt Management Office, local borrowing for the megaprojects is expected to reach 49.33 billion baht this year and to peak at 98.77 billion baht by 2011.
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