Wholesale business is expected to rev up growth in bank loans next year, driven by the government's ongoing infrastructure megaprojects, say bank executives.
Bangkok Bank (BBL) president Chartsiri Sophonpanich said corporate loans will be a key segment supporting loan expansion in 2018.
Loan demand from the private sector is improving in accordance with a pickup in Thailand's economic momentum, which is partly propelled by the government's infrastructure investment.
There are more opportunities for financial institutions to be involved with the government's infrastructure projects. For instance, BBL signed syndicated loan contracts with three other financial institutions in October to finance the Pink Line and Yellow Line monorail projects, but the loans have yet to be withdrawn.
More procedures will be needed as details of the projects are unveiled, Mr Chartsiri said.
BBL, the country's largest lender by assets, is working with Krungthai Bank, Siam Commercial Bank and the Export-Import Bank of Thailand to finance the construction of Bangkok's Pink Line and Yellow Line projects, worth 63.4 billion baht.
With the improving economic momentum, BBL expects better GDP growth in 2018, Mr Chartsiri said, noting that the bank's economic forecasts are still being finalised.
He said the ongoing economic recovery has benefited some business segments, particularly exports, and will gradually spill over to other areas and bolster Thailand's macroeconomic condition.
The government's economic roadmap will strengthen and sustain the country's economic fundamentals over the next three to five years, he said.
Despite improving economic data, more time is needed for non-performing loans to fall because NPLs are a lagging indicator of economic conditions, Mr Chartsiri said.
BBL expects to contain bad debts at the existing level through year-end 2017, with loan delinquency expected to gradually decline in 2018.
As of September, the bank's NPL ratio stood at 3.8%.
Separately, Kasikornbank president Kattiya Indaravijaya said the country's GDP growth will improve next year, driven by public investment, exports and tourism.
Kasikorn Research Center, the bank's research unit, is finalising its forecast for next year's economic outlook.
Ms Kattiya said corporate loans are a key segment to support the bank's loan expansion in 2018. The bank has set targets for overall and corporate loan growth next year in the range of 5-7% each.
Wasin Saiyawan, Siam Commercial Bank's head of the corporate segment, said infrastructure projects are a focus of the bank, particularly in the construction and energy sectors.