TMB Bank's chief executive Subhak Siwaraksa said that if the political turmoil lasted too long, banks' lending figures were likely to show the effects in the second or third quarters. However, there has been no negative effect in the first quarter.

"I believe the uncertainty will end quickly, so it will not hit overall private investment much this year. Loan growth in the banking sector will be on target," he said.

TMB Bank is confident of achieving its lending target this year, particularly in the current quarter, as its lending figures showed a positive trend in the first two months. At the end of February, the bank's new loans had grown by Bt10 billion, while it aims to achieve loan growth of Bt55 billion for the whole year - a growth rate of about 8 per cent or 10 per cent.

Bank of Ayudhya president Pongponit Tejagupta said the political factor would not affect banking industry lending in the first quarter. Most loans in the period were approved before the political tension occurred.

However, he agreed that if the political tension were prolonged, it would possibly affect lending around the second or third quarters. Investors who need new funding will delay decisions on bank borrowing if the political situation becomes more serious.

He said that if the infrastructure mega-projects were delayed, there would be no effect on bank's lending this year as lending targets were calculated without an assumption of influence from the mega-projects.

Pongpinit said the bank had changed neither its loan growth target of 8 per cent nor its projection for the country's economic growth. The bank is in a "wait and see" stage, he said, but the country has strong economic fundamentals.

Somruedi Banchongduang

The Nation