Companies have postponed the drawing down of new credit lines as they await clarity on US tariffs following the announcement of the 90-day suspension period, according to a Bank of Ayudhya (Krungsri) executive.
Prakob Phiencharoen, head of Krungsri's corporate and investment banking group, said the bank is closely monitoring corporate loan demand for the remainder of the year, even though corporate loan growth met targets during the first quarter.
For 2025, Krungsri aims for corporate loan growth of 5-7%. As of March this year, the bank had expanded its loan portfolio by around 5%.
However, Mr Prakob admitted that if clients continue to delay investment decisions due to uncertainty surrounding US trade policy, it could put pressure on the bank's corporate loan expansion throughout the year.
Mr Prakob noted that growing uncertainty concerning tariff policies imposed by major global economies remains a significant challenge for corporate loan growth in 2025. Despite this, the corporate segment continues to be a key contributor to Krungsri's overall loan expansion, especially as growth in other business segments slows, he said.
Nonetheless, corporate loan demand continues to show positive signs, driven by both inbound and outbound investments, as well as sustainability-focused financing programmes.
Key growth sectors include renewable energy, industrial estates, infrastructure, food and beverage, and healthcare, supported by both domestic and international operators.
Inbound investment is primarily flowing from Hong Kong, Taiwan, South Korea, Japan and China. Krungsri currently has several investment deals in the pipeline, including project finance, mergers and acquisitions, and joint ventures.
Regarding the automotive sector, Mr. Prakob said Krungsri has transitioned its focus to the electric vehicle (EV) segment, supporting the entire value chain -- from manufacturers and auto parts suppliers to car dealerships. The bank is also adjusting its portfolio to balance exposure between Japanese and Chinese EV brands amid the ongoing EV disruption.
Krungsri, Thailand's fifth-largest bank by total assets, is 76.8% owned by Japan-based Mitsubishi UFJ Financial Group. As of March this year, its corporate loan portfolio stood at 688.9 billion baht, with 193.2 billion baht from Japanese corporates and 495.6 billion baht from Thai and multinational firms.
"Given the elevated uncertainties in both global and local economies, we are focusing our growth strategy on select sectors while closely monitoring those facing greater challenges," Mr Prakob added.
For example, Mr Prakob said that the real estate sector is confronting several headwinds, including a slowdown in residential projects, an oversupply in office space, and a sluggish hotel market tied to softer tourism trends. Additionally, real estate operators face pressure from bond rollover issues.