Thai banks' loan growth fell by 0.41% year-on-year in the first two months of 2015, adding to signs of lukewarm first-quarter economic growth.
Fourteen commercial banks' outstanding loans amounted to almost 10.1 trillion baht as of Feb 28, down by 41.51 billion from at the end of last year, Kasikorn Research Center (KResearch) data show.
The figure took into account the transfer of loans worth about 200 billion baht from the Bank of Tokyo-Mitsubishi UFJ's Bangkok branch to Bank of Ayudhya (BAY) after the Japanese bank became the Thai bank's largest shareholder.
In the year to Feb 28, seven small banks reported the biggest declines in loan growth, falling by a combined 1.92% to 1.16 trillion baht.
Medium-sized banks Thanachart Bank and TMB Bank had a combined 0.85% decrease to 1.18 trillion baht.
The five big banks — BAY, Krungthai Bank, Bangkok Bank, Siam Commercial Bank and Kasikornbank (KBank) — had a combined 0.11% drop to 7.74 trillion baht, KResearch said.
Only KBank, TMB Bank and Land and Houses Bank reported higher loan growth at 2.08%, 0.66% and 0.55%, respectively.
The Industrial and Commercial Bank of China (Thai) had the biggest loan decline at 10.5% in the year to February, followed by Tisco Bank at 2.61%.
However, lending figures marginally improved last month after banks saw their aggregate loans shrink by 0.96% or 97.1 billion baht month-on-month in January.
Outstanding loans at the end of February were up 0.5% or 50.6 billion baht from the end of January, increasing by 3.65% or 355 billion over the same period last year.
The month-on-month increase in outstanding loans of the 14 banks could be attributed to the rise in working capital and mortgage loans, while new car loans remained a drag, KResearch said.
Thanyalak Vacharachaisurapol, head of money and banking at KResearch, said lending last month showed improving signs from January, supported largely by corporate and SME loans.
Growth in wholesale businesses came from short-term loans and working capital rather than long-term loans and project finance, as large companies were waiting for signs of economic momentum, particularly from government investment.
The situation is expected to improve in the second half of this year.
Retail banking has been sluggish from the start of this year amid the struggling economy and swelling household debt.
Weak automobile loans were in line with the 12.8% year-on-year decline in new-car sales last month.
Among retail loans, only mortgages showed positive signs, Ms Thanyalak said.