Loan growth for 10 banks as debt relief kicks up credit lines
Ten SET-listed banks delivered loan growth during the first four months of the year, thanks to brisk wholesale lending and an additional credit line provided under the debt relief scheme, even as the economy reeled from the pandemic.
In the January-to-April period, the 10 commercial lenders saw their loans outstanding rise by 3.9% from the end of last year and 5.9% on the same period a year earlier to 11 trillion baht, according to filings with the Stock Exchange of Thailand.
Krungthai Bank (KTB) recorded the biggest loan growth in both year-on-year and sequential terms at 10.8% and 8.3%, respectively, to 3.04 trillion baht at the end of April.
Kiatnakin Bank was in the second spot, delivering 10% and 6.8% increases from a year earlier and the end of 2019 to 246 billion baht at the end of April.
CIMB Thai Bank (CIMBT) saw total loans jump 9.6% from a year earlier and 5% from the end of last year to 233 billion baht at the end of April.
On the other end of the scale, total loans at TMB Bank (TMB), Land and Houses Bank (LH Bank) and Tisco Bank (Tisco) at the end of April dropped from a year earlier and the end of December.
LH Bank's loans outstanding fell by 3.7% from a year earlier and 1.2% from the end of 2019 to 150 billion baht, Tisco's shrunk 3.3% and 3.8% to 224 billion baht and TMB's dipped 1.9% and 0.4% to 644 billion baht in the same period.
The Bank of Thailand said recently that commercial loan growth could be attributed to switching to financial institution lending based on bond issuance for some companies amid volatility in the debt instrument market.
For gross bad loans, aggregate non-performing loans (NPLs) spiked to 454 billion baht at the end of April from 415 billion baht at the end of last year and 426 billion baht at the end of December.
In terms of ratio, CIMBT had the highest NPLs at 5.14% of loans outstanding at the end of April, compared with 4.32% a year ago and 4.59% at the end of 2019.
KTB's gross NPL ratio was 4.27% at the end of April, down from 4.48% a year earlier and 4.33% at the end of last year.
LH Securities said in a research paper that KTB's strong loan growth was largely supported by government loans and long-term corporate loans.
Higher state spending to blunt the economic blow from the pandemic was a boon to KTB's loan growth, the securities broker said.
On Monday, KTB president Payong Sriwanich said the bank offered 596 billion baht in credit lines through debt restructuring and soft loans to 171,727 customers, of which 90% were individuals and small and medium-sized enterprise (SME) borrowers.
Meanwhile, Kasikorn Research (K-Research) said financial assistance measures to soften the impact of the outbreak would support loan expansions for the banking industry in the second quarter of the year.
K-Research forecasts 17 banks to deliver loan growth of 5-6% from the end of 2019 during April to June, up from 4% in the first three months of the year.
The research house said corporate companies are re-prioritising their funding sources to bank lending from bond issuance, while debt restructuring is also gives a boost to banks' loan growth.
The economic downturn is pushing up NPL ratios in the second quarter from 3.05% in the first quarter, according to K-Research.