consumer loan growth flat as belts tightened

Consumer loans were Bt1.56 trillion, up 16.29 per cent year on year, compared with a 16.25-per-cent hike in the second quarter, according to data released by the Bank of Thailand (BOT).

Corporate loans, however, increased continuously in the third quarter, though some sectors posted slower growth.

Banking-sector loans totalled Bt7.16 trillion, a 17.92-per-cent rise compared with 16.35 per cent in the second quarter.

Krirk Vanikkul, the BOT's assistant governor, said debtors had been more cautious on consumer lending in current economic conditions while people were in any case reluctant to spend future income.

"The central bank is not much worried about the slowdown in consumer loans, because they do not largely relate to employment," he said.

Housing loans were Bt807.6 billion, up 14.92 per cent from last year's third quarter, slightly higher than the 13.68-per-cent hike in the second quarter.

But property loans for other purposes marked a deeper contraction of 23.94 per cent in the third quarter, compared with 21.71 per cent in the previous quarter.

Loans for developers' land banks fell 1.71 per cent to about Bt40 billion in the third quarter, improving on the 1.97-per-cent contraction in the second quarter.

However, car and motorcycle loans grew 29.74 per cent to Bt345.98 billion in the third quarter, less than the 32.2-per-cent hike in the previous quarter.

This is the picture not only in the household sector: the business sector has reacted conservatively to the impact on its balance sheets, causing the banking system's corporate loans to grow moderately or fall.

According to the central bank, loans to retail and wholesale businesses posted constant growth of Bt11.51 per cent to Bt1.08 trillion in the third quarter, compared with a 11.53-per-cent hike in the second quarter.

Construction loans posted continuing contraction of 23.13 per cent in the third quarter, compared with a 23.55-per-cent drop in the previous quarter.

Krirk said the business sector should prepare itself to go along with the global economic slowdown in the spirit of the sufficiency economy in order to minimise its effects, however severe it eventually proved to be.

Despite prolonged political uncertainty and expected impact from the global economy, some industries continued to mark impressive advances in the third quarter.

Manufacturing loans expanded 12.35 per cent on year to Bt1.74 trillion in the third quarter, having grown only 7.41 per cent on year in the second quarter.

Loans for transportation were Bt214.84 billion, a 8.57-per-cent rise, higher than the 2.79-per-cent hike in the second quarter.