Bangkok Bank's Vietnam branches expect merger and acquisition (M&A) deals for Thai companies in the country to boost loan growth this year amid the economic slowdown.
BBL's branches in Ho Chi Minh City and Hanoi have several M&A deals in the pipeline. A few of them, in the construction, property and hotel sectors, are expected to be completed this year.
This could increase the bank's lending in the second half after it booked lower-than-targeted growth for the first half due to Vietnam's sluggish economy and banking industry, said Tharabodee Serng-Adichaiwit, a senior vice-president and general manager for Vietnam.
For the first half, lending at BBL's Vietnam branches expanded by 2-3%, far below its full-year target of 10%.
Vietnam's GDP growth during the period was 4.9%, marginally down from 4.93% year-on-year.
Thai companies are keen on expanding in advance of the Asean Economic Community (AEC) slated to begin at the end of 2015, he said.
Mr Tharabodee said many large Thai large corporations have been seeking business opportunities in Vietnam via both organic growth and acquisitions after the recent property bubble burst there, leading to falling asset prices.
The leading Thai property developer Pruksa Real Estate Plc (PS) plans to start developing its 300-400 million baht Social Housing project in Vietnam in a few months after acquiring a land plot worth 270 million baht in Hai Phong. SET-listed PS signed an agreement with BBL for credit facilities to support the property project, he said.
Banking business in Vietnam may improve after the government establishes a national asset management company (AMC). Non-performing loans (NPLs) in the country's banking industry will be transferred to the AMC and are expected to decline to 3% of outstanding loans next year, down from 4%, said the central bank.
BBL shares on the SET fell to 199 yesterday, down six baht, in trade worth 1.4 billion baht.