Floods force KTB to review 2012 business plan
Krungthai Bank is reviewing its business plan for next year after the floods dampened its lending this quarter.
KTB president Apisak Tantivorawong said yesterday that although the bank's year-to-date loans had increased by 10 per cent, higher than the 7-per-cent target, loan growth in the fourth quarter had been slowed by the floods. New loans to small and medium-sized enterprises might drop, as several customers might have to shut down because of the floods.
After the flood recedes, the bank will focus on providing financial assistance to customers because credit demand in the first quarter of the new year will be driven by business reconstruction before investment returns in the next quarters.
The target for loan growth under the revised business plan is currently unpredictable. The bank had targeted loan growth for this year at 6-8 per cent.
The first quarter will also see higher non-performing loans because of the floods. The bank will continue taking loan loss provisions of Bt1.5 billion per quarter even though the flood is likely to swell NPLs.
The economy next year will improve because growth in gross domestic product this year was constrained by the flood's damage to the economy in the fourth quarter.
GDP next year should be higher by at least 4 per cent. KTB's loan portfolio should grow faster than GDP by a multiple of 1.5-2, Apisak said.
Under the 2012 business plan, KTB will try to increase yields from corporate and SME loans.
Even though the policy rate will likely stay flat and then decline, the board will have to consider the liquidity factor as well.
"If banks' liquidity is not enough, banks have to chase deposits, so deposit rates cannot go lower. However, liquidity of Bt1.4 trillion at present can cover the demand for loans," he said.
Exports are also a key channel to increase the country's liquidity, he added.
KTB in cooperation with PTT and the Energy Ministry yesterday launched the NGV credit-card scheme, in which KTB will issue credit cards to public vehicles in Greater Bangkok using natural gas for vehicles.