Senior executive vice president Surachai Chitrasenee said the growth in personal loans in the first five months this year was lower than the full-year target of 20 per cent, due mainly to the lack of consumer confidence and lower spending .

"Both loan applications and the bank's loan approval rate have decreased as result of the economic slow-down. The bank's approval rate now is around 30-35 per cent of total applications, down from 40-45 per cent last year," he said.

With loan applications falling, BankThai relaxed some qualifications, including the requirement for a minimum monthly income of Bt15,000. The bank now considers applicants with a monthly income of Bt10,000, but is keeping its focus on a borrower's creditworthiness.

Personal loan products make up most of BankThai's retail-loan portfolio, which increased by Bt2 billion to Bt16 billion at the end of May. However, there was also a slight increase in late payments and non-performing loans in the first five months of the year.

The country's political uncertainty affected overall lending in the first five months of the year, BankThai president Phirasilp Subhaphonsiri said.

Loan growth was below target due to a slow-down in private investment; even though capacity utilisation has already reached 75 per cent, investors lack confidence for further investment due to the political turmoil. However, the bank expects the political climate will improve in the second half of the year.

The six largest banks had total outstanding loans of Bt4.04 trillion at the end of May, an increase of only Bt33.83 billion, or 0.84 per cent, from the start of the year.

Krung Thai Bank's reported new loans of Bt409 million in the period - growth of only 0.04 per cent. Siam Commercial Bank recorded the highest rate of growth with a 3.91-per-cent increase in loans in the first five months of the year, followed by Kasikornbank with 2.15 per cent.

Bangkok Bank, the country's biggest bank in terms of assets, saw growth of only 0.99 per cent, while TMB Bank saw lending drop by 4.66 per cent in the first five months of the year.

Somruedi Banchongduang

The Nation