Three banks rev up loan goals

Three large banks have set ambitious goals for their lending next year based on the anticipated economic recovery and government investment spending.

A visitor examines a model at the SCB Home Loan Expo 2009 yesterday. NATTHITI AMPRIWAN

Kannikar Chalitaporn, president of Siam Commercial Bank, said the bank's business plan for next year would be more aggressive than this year's in line with the recovering economy.

SCB predicted the country's gross domestic product would grow by 3-4% in 2010, mainly supported by the government's 1.45-trillion-baht Thai Khem Kaeng infrastructure programmes to be implemented from 2010 to 2012. The sheer size of the budget would facilitate loan expansion in the banking sector next year.

Normally, the bank's total loan growth target would double the GDP growth rate, but its 2010 business plan has not been finalised yet. Lending to small and medium-sized enterprises and auto loans are the focus next year.

Low interest rates would also support business expansion despite their upward trend.

The country's policy rate is expected to be raised by 25-50 basis points in the second half of next year.

At Krung Thai Bank, president Apisak Tantivorawong said higher inflation would put pressure on rates next year. The Bank of Thailand's one-day repurchase rate is expected to increase by 0.75-1% next year from 1.25% currently. However, the increase is unlikely to affect loan growth given the improving economy and rising loan demand.

KTB, the country's largest state-owned bank, planned to concentrate on government loans based on large budgets of the Thai Khem Kaeng programme.

The bank targeted a 25% market share in project finance under the government's total investment budget of 1.06 trillion baht next year compared to 20% under normal circumstances.

Mr Apisak said the bank aimed to increase new loans by 7% to 75 billion baht next year, up from 70 billion baht this year.

Building and construction loans would be in the bank's key focus next year after the loan portfolio has decelerated for two years due to the slowing business sector.

Both banks, however, would miss their loan growth targets this year of 3-5% for SCB and 5-6% for KTB due to the economic difficulties and deteriorating debt payments.

Kasikornbank president Prasarn Trairatvorakul said the bank has set its loan growth target for next year of 7-9% or 61-83 billion baht based on the projection of GDP growth of 3-3.5%. The bank would mainly focus on retail and SME loans for next year.

KBank would see loan growth of around 3% this year, modestly lower than the 4-5% target due to the unfavourable economic conditions.

Relate Search: Kannikar Chalitaporn, Siam Commercial Bank, Prasarn Trairatvorakul, Thai Khem Kaeng, Apisak Tantivorawong