Banks now more wary over loans to exporters
Given the sharp appreciation of the baht against the US dollar, TMB Bank has temporarily stopped extending loans to new exporter customers while other commercial banks are closely monitoring the situation.
"TMB has put lending to new customers engaged in the exporting sector on hold as a pre-emptive measure due to the continuing baht strength," first senior executive vice president Prakarn Tawisuwan said. However, the bank is continuing to provide loans to current exporter customers, he said. Prakarn said export loans are mainly given to operators in small and medium-sized enterprises (SMEs). The country's fifth-largest bank's total SME loan portfolio is around Bt260 billion-Bt270 billion, of which 40 per cent are loans to exporters. The bank's total loan portfolio now stands at Bt550 billion. Exporters are currently exposed to two risk factors — the stronger baht and rising interest rates. Their profit margins have slipped by around 10 per cent after the baht rose by between 7 per cent and 8 per cent in the first quarter and lending rates were jacked up by 200 basis points, Prakarn said. "If the baht remains strong until the end of this year and the MLR [minimum lending rate] climbs to 9 per cent, exporters will be significantly affected. This would be felt most in the third and fourth quarters [of this year]," Prakarn said. However, Bangkok Bank president Chartsiri Sophonpanich recently predicted that the MLR this year would not exceed 8.5 per cent, which was echoed by Siam Commercial Bank president Jada Wattanasiritham. Jada said the bank's exporting debtors are being adversely affected by the strong baht, but their debt-servicing ability remains in good shape. "Our exporter customers have only complained about the baht appreciation because it eats into their profits when they repatriate their earnings into baht," she said. Bangkok Bank executive vice president Chansak Fuangfu, said the bank's customers have not been significantly affected by the baht strength, although some are feeling the pinch. "The ability of exporter customers to repay debts is still satisfactory, although their profit margins are being squeezed by the rising baht," he said. Adding that the bank was ready to assist customers if they ran into difficulties caused by changing foreign-exchange rates and update them about the economic situation both domestically and overseas. Bangkok Bank has about 10-per-cent market share of the import-export loan market.
Somruedi Banchongduang The Nation
|
