Housing and person loans up, reflecting consumer confidence

Economy June 04, 2018 01:00


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BANKS’ HOUSING and personal loans set high growth on consumer confidence for the first four months of this year, while Bank of Ayudhya’s loan growth target is set at 8 per cent and Krungthai bank’s loan growth estimate is targeted at 6-7 per cent.

Dan Harsono, head of retail and consumer banking at Bank of Ayudhya, said that retail customer loans came in higher than expected, increasing 2-3 per cent year-on-year for the first four months of this year. He attributed this to rises in hire purchase loans, Krungsri Auto, credit card loans for Krungsri Consumer, housing loans and personal loans.

The four-month loan-growth figure is on track for its target of 8 per cent for the whole of 2018.

For the latter half of this year, Harsono sees potential for expansion in the bank’s loans resulting from continuing positive factors. 

According to the National Economic and Social Development Board (NESDB), Thailand’s gross domestic product (GDP) expanded 4.8 per cent year-on-year in the first quarter of this year, compared to the previous quarter’s growth at 4 per cent.

That economic growth, coupled with higher consumer confidence, has propelled hire purchases, credit card loans, mortgages and personal credit to rise as targeted.

Aside from the local economic supports, Bank of Ayudhya has launched campaigns including a saving deposit campaign encouraging customers to make transactions through mobile banking and ATMs.

“This year, the first-quarter GDP figure has been very good, which has led to bright prospects for the remaining months (of this year) and improvement in the bank’s retail business group,” Harsono said.

In regard to new accounting standard IFRS9, all banks have received impacts and Bank of Ayudhya has prepared its work system to cope with the accounting standard, which is scheduled to come into effect in early 2019.

Oranut Siraprapa, first executive vice president and head of retail strategy product and segmentation Group at Krungthai Bank (KTB), said that the bank’s retail loan has grown satisfactorily for the first four months on expectation to achieve estimated loan growth of 6-7 per cent this year.

She said that the bank would likely continue seeing satisfactory loan expansion for the rest of this year, as it has been continuously seeking new institutional customers. She points to the bank’s strength in connection with the Comptroller General’s Department’s electronic Government Fiscal Management Information System (GFMIS) and the bank’s competitive interest rates.

While its non-performing loans remain below 5 per cent of total outstanding loans, KTB continues controlling the quality of its retail loans at a satisfactory level, she said.