The state-owned Government Savings Bank (GSB) is set to lower its lending growth target and raise loan-loss provisions this year amid the heightening economic and political uncertainties, says its top official.
President and chief executive Worawit Chailimpamontri said the bank will wait for the second-quarter economic growth figure before making a decision on its lending growth target.
The GSB has set a loan growth target of 80-90 billion baht this year, the same level as last year.
The bank typically sets its loan growth target at 1.5 times the forecast for economic growth, Mr Worawit said.
He said the GSB estimates economic growth will likely expand by less than the 4% projected previously.
The Bank of Thailand earlier said it will trim its gross domestic product (GDP) growth target to around 3% this year from 4%.
The political stalemate has damaged the economy, which was already running out of steam under swelling household debt and the end of the first-time car buyer scheme.
Mr Worawit said the GSB's loans to the government's large projects will likely fall short of its target this year following delays to the 2-trillion-baht infrastructure investment and the 350-billion-baht water management plans.
This could also cause the bank to miss its overall loan growth target.
The GSB's public loans last year also fell short of its target as the bank did not extend a loan of 10 billion baht for the water management projects after the case was taken to court.
Both the infrastructure and water management investments have hit snags. A court has ruled that the government must conduct public hearings before proceeding with the water projects, while the infrastructure investment is pending a court's decision after the Democrat Party sought a ruling on whether the borrowing bill to fund the projects is constitutional.
The GSB also plans to increase its loan-loss provisions in case the country's economic performance is disappointing.
"We will put aside the provisions at a high level, or at least the same level as the central bank's minimum requirement, as our financial position remains healthy,'' said Mr Worawit.
The bank's investment in the Islamic Bank of Thailand has become a large burden because the latter has high bad credit.
The GSB owns a stake of about 39% in the Islamic Bank.
The bank aims to deliver 21 billion baht in net profit after provisions this year, close to the 22 billion achieved last year.
The GSB's assets rose to 2.17 trillion baht last year, up from 2.1 trillion in 2012, while liquidity amounted to 100 billion baht.
Its non-performing loans ratio stood at 1.14% of loans outstanding at the end of last year.