"Although the country's political tension has reduced, uncertainty continues because the crisis has not been resolved. There are still constitutional amendments and a general election to come," he said.

Moreover, he said banking stocks would be most affected by political factors, particularly in the current quarter. The uncertainty will make investors delay decisions, Prasarn added.

Charlotte Donavanik, senior executive vice president of

Bank of Ayudhya (BAY), said political turmoil in the first quarter had caused some investors needing funding to delay decisions on bank borrowing. This might therefore affect banks' loan expansion in the second quarter.

Both Kasikornbank and BAY achieved loan expansion in the first quarter. However, BAY will reconsider its loan-growth target for the entire year in the current quarter, while Kasikornbank will leave its loan  target unchanged.

Prasarn, however, added that with the Kingdom's strong economic fundamentals, banking business for the rest of the year still looked to be in good shape.

Siam City Bank president Arun Chirachavala believes banking business in the second quarter will be better than in the first due to seasonal factors, while political tension has declined. "The bank's loan growth in the first quarter was lower than target due mainly to several uncertain situations, as well as seasonal factors. But the rest of the year still has good prospects," he said.

Siam City Bank's new lending fell below Bt10 billion in the first quarter, while its full-year target is Bt40 billion.

Kosit Panpiemras, Bangkok Bank executive chairman, said the country's fundamentals for the first two quarters were similar. The global economy is the key factor, not domestic politics, he said. As a result, banking business between the two quarters will not differ significantly, he added.

Somruedi Banchongduang

The Nation