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Companies likely to look locally for loans
SOMRUEDI BANCHONGDUANG
Local banks could be beneficiaries from the global financial turmoil in early 2009 as foreign banks are likely to scale back operations due to constraints in their home markets.
Kannikar Chalitaporn, the president of Siam Commercial Bank, said the bank would increase corporate loan activity in 2009.
Funding demand in the domestic market was expected to increase in 2009 as the international markets remain uncertain, she said.
"Large companies will turn to raising funds locally rather than going abroad. Under this assumption, SCB will focus more on wholesale and corporate banking in 2009," Mrs Kannikar said.
Small and medium-sized business loans and retail banking will likely slow in 2009 due to the global economic slowdown, she said. Falling export growth and tourism arrivals would also hurt the Thai economy and potential growth for consumer banking.
Mrs Kannikar said given the volatility in the global market, SCB had tightened its credit lending practices and risk management.
"Liquidity in the market has tightened, and the loan market will not be open for everyone. Businesses should plan for this in setting their funding plans for 2009," she cautioned.
Krung Thai Bank president Apisak Tantivorawong agreed that local banks would have greater growth opportunities in the corporate and syndicate loan market as a result of the crisis.
"Only Krung Thai Bank can provide loans of up to 30 billion baht per corporate customer," he said.
But Mr Apisak agreed that the trend towards tighter market liquidity and higher funding costs would act as a constraint on businesses.
TMB Bank president Boontuck Wungcharoen said local banks would limit term loans for large financial projects more than foreign institutions.
Local banks typically set terms for up to five years, compared with 10 to 20 years for overseas banks, he said.
"Funding mismatches will remain a constraint for local banks in lending services," Mr Boontuck said, adding he expected more syndicated loans with other Asian financial institutions in 2009.
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