Kasikornbank (KBank) expects to book marginal growth this year, in line with economic circumstances.
The bank's loan expansion this year is expected to be marginal after total outstanding loans contracted by 2.29% for the first nine months of 2023 year-on-year.
KBank set a loan growth target of 5-7% this year, said chief executive Kattiya Indaravijaya.
As a result of the uneven recovery of the Thai economy and global uncertainties, the bank has been prudent with its loan expansion, using a selective strategy, said Ms Kattiya.
In addition, higher debt repayment of commercial loans should impact total loan growth this year, she said.
The loan contraction over the first nine months was attributed to a decline for the small and medium-sized enterprise, personal, home and credit card segments, in conjunction with tightening underwriting policies and non-performing loan outflow management, said Ms Kattiya.
However, regional and auto loans increased, according to the bank's investor presentation for the third quarter.
Thailand's third-quarter economic growth slipped to 1.5%, down from 1.8% in the previous quarter.
"We will wait for actual data in the fourth quarter before drawing a conclusion on flat or marginal loan growth for the whole year. The bank will set a loan growth target for 2024 in line with economic circumstances," she said.
Kasikorn Research Center anticipates 3.1% GDP growth next year, rising from a forecast of 2.5% in 2023.
The research unit cut its outlook for 2023 growth from 3.0% because of the global economic downturn.
Furthermore, KBank and its subsidiaries continue to set aside expected credit losses under a prudent approach to strengthening their financial status by being attentive to asset quality and considering global economic uncertainties, said Mr Kattiya.
KBank, the country's second-largest lender by total assets, is scheduled to announce its 2024 financial target next month.
Regarding rumours of KBank's plan to sell its shareholding of subsidiary Kasikorn Asset Management (K-Asset), she said the bank has no such plan.
The business segment continues to contribute positive fee-based income to the bank, said Ms Kattiya.
However, the bank is open to collaboration with business partners under several models to facilitate its long-term expansion, especially in the regional market under the KBank's AEC+3 strategy, she said.
K-Asset's total assets under management increased by 5.7% in the first nine months of 2023 from the end of 2022, surpassing industry growth of 2.8%.