Kasikornbank (KBank) has tightened loan approvals for China-related businesses amid heightening US-China trade tensions, which are pressuring the bank's trade finance segment.
The bank is scrutinising loans sought by China-related businesses, particularly from local customers who want to invest in China, president Pipit Aneaknithi said, noting these customers represent a small portion compared with the total client base of the China branch.
KBank, the country's second largest lender by assets, collaborates with China Minsheng Banking Corporation to operate in China under a local banking licence.
Mr Pipit said the trade spat has also dealt a blow to the bank's trade finance business and reduced its trade finance exposure, especially exports to China.
The trend is in line with Thailand's spluttering exports.
"Even if some unexpected incident [regarding the trade row] crops up, it would not cause a critical situation," he said.
"However, we need to closely monitor the situation."
China maintains its GDP forecast for this year at 6% growth, while other readings including exports, investment and consumption still show positive signs.
With this outlook, the bank is maintaining its business plan in China this year unchanged, but it will adjust some strategies to cope with greater uncertainties, said Mr Pipit.
He said the bank collaborates with business partners in adopting innovative technologies, including blockchain, to simplify letter of guarantee (L/G) services to facilitate business expansion.
Under the Thailand Blockchain Community Initiative project, 14 local and foreign financial institutions set up a joint venture company to offer L/G services using blockchain technology.
The innovation is being tested in the central bank's regulatory sandbox, from which it is expected to exit this month.
Moreover, Mr Pipit said KBank has upgraded its digital lending features and sped up the credit line process.
The bank kicked off the new features last week.
With an inverse process for digital loans compared with traditional personal loans, the bank will transfer the credit line to customers using data analytics.
After the potential borrower accepts the loan, analysis and risk management will then proceed.
In the initial stage, the digital lending service is limited to existing customers.
KBank will spend time assessing customer response, data accuracy and credit quality before offering the service to new customers, expected later in the year, he said.