The banking system last year was resilient, with good performance, the Bank of Thailand reported yesterday.
Credit growth slowed, while loan quality was still intact, albeit slightly deteriorated. Loan-loss provision and capital remained high.
The banking system’s lending expanded by 11 per cent, lower than in 2012 in tandem with a slowdown in the economy.
Consumer loans decelerated in almost all sectors as a result of a slowdown in car loan after the first-car tax-rebate scheme ended. There was also a slowdown in personal and credit-card loans as households became more cautious and banks became more stringent in loan approval, the BOT report said. Consumer loans grew by 12.9 per cent.
Corporate loans expanded by 10.2 per cent, a similar rate to 2012.
Expansion in this segment was mainly contributed by loans to small and medium-sized enterprises and to large corporates for foreign investment.
Loan quality remained sound, though slightly deteriorated, the central bank said.
Non-performing loans (NPLs) stood at Bt265.6 billion, increasing by Bt11.4 billion from the previous year. The ratio of gross NPLs to total loans dropped to 2.2 per cent, and to 1 per cent for net NPLs.
Special-mention loans (those overdue for more than one month but not more than three months) rose to Bt295.6 billion, driven by consumer loans, particularly for cars. Consequently, the ratio of SM loans to total loans went up from 2.2 per cent to 2.4 per cent. Nevertheless, banks have conservatively increased loan-loss provisions for future economic uncertainty, bringing the ratio of actual to regulatory loan-loss provision to 168.3 per cent.
Deposits and borrowing expanded at a slower rate than loans, which resulted in an increased ratio of loan to deposit and borrowing from last year’s 87.9 per cent to 90.7 per cent.
The banking system last year reported net profit of Bt214.9 billion, up by Bt41.1 billion from 2012, attributed to net interest income and fees.
Net interest margin (NIM) rose to 2.55 per cent and return on assets (ROA) to 1.33 per cent.
Banks’ capital position remained strong. Although a continuous increase in profit led to an increase in Tier 1 capital ratio to 12.6 per cent, redemption of subordinated debentures brought about a slight decline in the BIS ratio to 15.7 per cent.