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Banks report year-on-year slump in lending in January

The political uncertainty has affected spending and investment, causing bank lending in January to shrink from the end of last year, with Bank of Ayudhya (BAY) witnessing the highest drop.

Commercial banks excluding Krungthai Bank reported their monthly liabilities to the Bank of Thailand. Overall lending dropped 0.11 per cent from Bt6.47 billion to Bt5.75 trillion from the end of last year.

BAY faced the highest drop of Bt16 billion, or 2 per cent, followed by Siam Commercial Bank, which posted loan drop of Bt11 billion or 0.68 per cent, Tisco Financial Group, which dropped by 1.03 per cent and Bangkok Bank by 0.52 per cent.

Kasikornbank enjoyed the highest loan growth in the banking industry of Bt14.70 billion or 1.07 per cent, followed by TMB Bank of Bt5.01 billion or 1.07 per cent and Thanachart Capital, which saw loan growth of Bt1.76 billion or represent the growth of 0.23 per cent.

Despite the lending slump, deposits of commercial banks increased of Bt36.58 billion or represent the growth of 0.6 per cent. KBank enjoyed the highest growth of monthly deposits at 2.02 per cent or Bt30.98 billion from the end of last year, followed by TMB Bank, whose deposits grew 1.48 per cent or the amount of Bt7.8 billion and BAY, whose deposits in January was Bt7.12 billion or the growth of 0.93 per cent.

SCB reported a deposit plunged of Bt41 billion from the end of last year or represent the drop of 2.27 per cent, while Tisco witnessed a drop in deposits of Bt13.14 billion or represent the drop of 4.97 per cent.

Weidt Nuchjalearn, a first senior executive vice president of Krungthai Bank, noted that the slowdown in lending indicated that the competition for deposits this year would not be as intense as before and several banks would have to adjust to the lower loan demand.

KTB will have to review the deposit campaigns it has in the pipeline to match the loan demand and to manage the cost of funds. He added that these campaigns were essential to secure the depositor base as deposit terms reached maturity. It will focus more on current and savings accounts (CASA) as these are at a low level compared with the major banks.

KTB has a CASA ratio of 58 per cent, which it wants to boost to 70 per cent this year.


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