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BANKING
SOMRUEDI BANCHONGDUANG
Visitors admire a display at KTB headquarters to promote the bank's new ``Growing Green'' initiative aimed at increasing awareness of environmental conservation. |
Krung Thai Bank has already exceeded its loan target for the year after the first half, but is concerned that its asset portfolio has shifted toward shorter-dated loans as long-term investment activity has slowed.
Apisak Tantiworawong, the KTB president, said the bank lent 80 billion baht in the first half of the year, exceeding its full-year target of 60 billion.
But around 70% of the loans made in the first half were short-term, working capital loans for companies seeking added liquidity to cope with higher commodities and raw material prices.
Net loan growth for the year is expected to be lower as short-term loans are repaid over the next several months.
Mr Apisak said domestic investment showed little signs of recovery, a fact that would have implications for the maturity of the bank's loan portfolio.
Investment and consumer confidence has nosedived due to rising inflation, the US financial crisis and domestic political uncertainties.
"If domestic investment remains weak, the bank's term loan maturity will lag over the long term," Mr Apisak said.
While loan growth in the second half was expected to slow, KTB, the country's second-largest bank by assets, is keeping its loan targets for the year.
Mr Apisak, also the chairman of the Thai Bankers' Association, said bank loans sector-wide were expected to rise 5% to 6% this year.
Bank liquidity remains plentiful in the market to support loan growth, although competition for deposits has increased as banks seek to lock in funds ahead of expected interest rate increases.
KTB expects to raise 10 billion baht in new funds through a special three-month fixed deposit account paying 6% per year, a rate well above the average 2.375% to 2.625% rates paid for similar terms by other large banks.
The deposit programme, limited to one account per person with balances of 100,000 baht to one million, is only available at the four-day Confidence in Thailand exhibition, sponsored by the government and running until tomorrow at Impact Muang Thong Thani.
"The interest expenses for the special account won't really be that much when compared with the bank's deposit base of one trillion baht," Mr Apisak said, adding that the bank had no plans of extending the promotion beyond Sunday.KTB reported deposit expenses of 3.59 billion baht in the first quarter, with total interest expenses of 4.40 billion baht.
Mr Apisak presided yesterday over the launch of the bank's "Growing Green" initiative, an internal programme aimed at educating staff and customers about the problems of global warming.
Shares of KTB closed unchanged yesterday on the SET at 7.60 baht, in trade worth 164 million baht.
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