Shanghai: Bangkok Bank (China) or BBC, a wholly owned subsidiary of Bangkok Bank (BBL), expects to continue double-digit growth in lending in the next few years despite the Chinese economy appearing to cool down.
This year's lending growth target of 10% remains reachable assuming GDP in the world's second-largest economy expands by 7.5%, chief executive Suwatchai Songwanich said yesterday.
He said even though China's growth was expected to slow to 7% next year, the bank would enjoy double-digit growth in its lending in the coming years.
As a small bank, BBC has plenty of growth opportunity, Mr Suwatchai said, adding that the quality of the bank's customers and its international networks would underpin loan growth even though China's economy was losing momentum.
BBL, Thailand's largest bank by assets, has five branches in China operating under BBC, in Shanghai, Shantou, Xiamen, Beijing and Chongqing.
The bank is set to open its first subbranch in the Shanghai Free-Trade Zone early next year.
With a local banking licence, BBC can open more branches.
BBL overall has 28 foreign branches in 13 countries and territories.
Apart from the Chinese operation, the bank's international network extends to Hong Kong, Indonesia, Singapore, the Philippines, Britain, Vietnam and the US.
Myanmar awarded BBL a limited banking licence in early October, with businesses restricted to corporate and wholesale banking activities such as underwriting trade finance.
BBC's lending portfolio amounts to US$1.1 billion, while its non-performing loans have declined to below the average rate of the banking industry in China.
Bad loans increased to 1.2% of outstanding loans from 0.99% at the end of last year, in line with the country's economic circumstances.
China's economic growth cooled to 7.3% in the July-September quarter from the same period last year, the weakest since the global financial crisis.
It reported year-on-year growth of 7.5% in the second quarter.
"Lower interest rates will mean tougher competition in the banking sector here and pressure their margins to narrow, although it will be manageable," Mr Suwatchai said.
"The bank already estimated a rate cut, it just happened earlier than we expected. We predicted China's central bank would trim its rate around next year's second quarter."
China's central bank recently cut its one-year benchmark lending rate by 40 basis points to 5.6% and one-year deposit rate by 25 basis points to 2.75% for the first time in more than two years to prop up flagging growth.
BBL shares closed yesterday on the Stock Exchange of Thailand at 202 baht, unchanged, in trade worth 844 million baht.