Large local banks anticipate their corporate clients will face heightened challenges in the second half of this year because of global uncertainties and concerns about a potential US recession.
To cope with rising credit risk for some customer segments, controlling asset quality is the banks' goal.
Kris Chantanotoke, chief executive of Siam Commercial Bank (SCB), said some corporate customers are expected to encounter increased operational challenges in the latter half of the year, driven by both internal and external risk factors.
Domestically, several industries are experiencing reduced demand, which aligns with softer economic growth, he said.
On a global scale, various business sectors are likely to be affected by economic uncertainties, geopolitical risks and concerns over a possible US recession.
In light of these challenges, the credit risk for certain corporate clients is expected to rise, said Mr Kris. SCB plans to adopt a more cautious and selective approach to loan growth to maintain asset quality, he said.
However, Mr Kris said the bank's corporate clientele remains strong and is well-positioned to navigate these uncertainties.
Despite stagnant growth in some industries, SCB anticipates positive corporate loan growth this year. SCB, Thailand's fourth-largest lender by total assets, set a modest loan growth target for 2024 and recorded slight growth in the first half.
"In our loan portfolio, some segments contracted in the first half this year, such as auto loans and certain segments of mortgages," he said.
"For mortgages, the bank is primarily focusing on houses priced between 5 and 7 million baht per unit."
Chartsiri Sophonpanich, president of Bangkok Bank (BBL), said the bank will focus on supporting its customers amid increasing uncertainties in both the local and global economies.
In response to rising challenges related to asset quality, the bank plans to increase its provisions for expected credit losses in the second half of the year, while carefully managing costs and appropriately adjusting interest rates for customers, he said.
Despite achieving marginal loan growth of 1.8% in the first half, Mr Chartsiri said BBL will maintain its existing loan growth target of 3-5% for the full year.
Kattiya Indaravijaya, chief executive of Kasikornbank (KBank), said the bank will continue to cautiously grow its corporate loan portfolio in the second half of this year because of heightened global and local uncertainties.
While large corporations remain a key focus for the bank's lending growth this year, KBank will remain selective in approving loans.
The bank will prioritise top-tier companies within industries that have strong financial conditions to manage asset quality amid rising business challenges, she said.
As of June this year, the six domestic systemically important banks reported a combined loan portfolio of 13.49 trillion baht, a slight decrease of 0.14% from 13.51 trillion in December last year. These banks forecast total loan growth in the range of 3-5% for 2024.