KASIKORNBANK is planning to cut its 2014 loan-growth target by 2 percentage points from the earlier goal of 9-11 per cent in response to the actual situation, bank president Predee Daochai said.
KBank will propose the new loan-growth target to the board of directors soon, he said.
The bank has acknowledged that the current uncertain environment, mainly due to the political unrest and the lack of a date for formation of a new government, has reduced consumer spending.
Last November, KBank targeted loan growth this year of 9-11 per cent based on projected growth in gross domestic product of 5 per cent. However, Kasikorn Research Centre this week predicted that GDP growth this year would be only 2.2 per cent if a new government cannot be formed by July.
Predee said credit tightening by banks was another factor that would lower loan growth this year after they saw the rates of non-performing loans rise.
KBank’s NPL rate is 2.02 per cent, so far within its 2014 target of no more than 2.2 per cent. But the trend of NPLs is rising.
He said lending growth of the banking industry was expected to decline to 8-9 per cent from 10-11 per cent last year.
The property market is expected grow more slowly as people postpone their decisions to buy a home and transfers are delayed, while the developers have suspended launches of new residential projects. However, KBank has not changed its target for housing loans of Bt52 billion, up 8 per cent from Bt48 billion last year, said executive vice president Chatchai Payunahaveechai.
The first two months were slow, however, recording Bt4.2 billion worth of mortgages, down by 12.5 per cent from Bt4.8 billion in the same period last year. The bank expects its housing loans in the first quarter will drop by 10 per cent.
“We will actively provide housing loans of Bt5 billion this month as this is a time of housing transfers. Housing loans in March should recover from the drop in the first two months, and should bottom out in the first quarter after the political situation eases,” he said.
Chatchai added that the mortgage market this year would amount to Bt560 billion, of which net loans would be Bt200 billion. Outstanding housing loans in the banking industry by the end of this year will climb to Bt2.7 trillion from Bt2.5 trillion year to date.
KBank yesterday signed a purchase agreement for a Bt10-billion performing housing-loan portfolio with Secondary Mortgage Corporation. Earlier, SMC purchased Bt5.4 billion worth of KBank housing loans under this programme.