Revitalised property, construction sectors set to shore up loan demand: KBank
July 10, 2014 00:00
By SUCHEERA PINIJPARAKARN
CONSTRUCTION and property development are among first sectors to become more active after the political unrest ended, according to Kasikornbank.
The military’s ruling National Council for Peace and Order (NCPO) has attempted to boost business confidence through making overdue payments to rice farmers, rebooting state spending and appointing new members to the Board of Investment.
Vasin Vanichvoranun, executive vice president of KBank, said that when consumer confidence resumed, businesses also resumed their activities to cash in on the pick-up in purchasing power.
He said construction and property projects had become more active during the past month since the NCPO seized power, adding that developers that had been focusing on selling their existing projects were resuming new projects in the second half of the year.
He said that apart from residential projects, the bank had seen a rising trend of mixed-use projects, and KBank is eyeing these closely for potential loan applications.
Two or three mixed-use projects are to be launched by the end of this year, valued at around Bt10 billion to Bt20 billion, he said.
Early this month, KBank was one of two lenders to support IconSiam, a high-end mixed-use project developed by Siam Piwat, Charoen Pokphand Group and Magnolia Quality Development Corporation.
Siam Commercial Bank yesterday provided a loan of Bt2.69 billion to Golden Land Property Development for the FYI (For Your Inspiration) Centre, a mixed-use office building and hotel project on Rama IV and Ratchadaphisek roads.
Property developers will require funding through loans and property funds including real estate investment trusts. REITs will be especially important, with a total of Bt30 billion to Bt40 billion worth expected to be launched in the current half of the year.
Suradech Kietthanakorn, first vice president of KBank, said medium-sized corporates in construction and building materials had stocked more inventories and contractors had contacted the bank, asking for letters of guarantee to prepare for upcoming infrastructure projects.
Loan demand in energy, including renewables, is expected to resume as well, driven by the unblocking of Ror Ngor 4 (factory operation) permits to accommodate investment in rooftop solar energy. The bank anticipates that the energy sector will require funding of Bt270 billion this year.
Vasin concluded that KBank would see even more deals next year based on the activities of the private sector.
As for this year, judging from the positive signs for the economy in the second half, financial transactions at KBank may be not less than Bt24 trillion, thus significantly boosting the bank’s fee income compared with the first half. KBank’s fee income for the entire year should achieve the growth target of 10 per cent.