Commercial banks' loan growth 4.6% in Q2, BOT says
Commercial banks saw steady lending growth of 4.6 per cent year on year for the second quarter, while setting aside more provisions to cope with drops in loan quality, particularly for loans to small and medium-sized enterprises, according to the Bank of
Jaturong Jantarangs, senior director at the BOT, said commercial banks’ loan growth became steady after consistent slowdowns from private investment and spending since the fourth quarter of 2012. The first quarter’s loan expansion was 4.3 per cent year on year.
Business loans, which accounted for 68.7 per cent of total lending, increased by 3.2 per cent year on year in the April-June period from higher figures in the financial, property, manufacturing and utility groups, he said.
Loans for large enterprises edged up 0.7 per cent, compared with a 2.6-per-cent rise in the first quarter, as commercial businesses turned to raising funds through debentures, he said. SME loans rose 5.2 per cent, compared with the first quarter’s 4.4 per cent.
Jaturong said consumer loans, which accounted for 31.3 per cent of total lending, expanded steadily at 7.8 per cent on the back of rises in personal loans and those for residential purposes.
At the end of the second quarter, outstanding non-performing loans (NPLs) stood at Bt311.6 billion, up Bt13.3 billion from the previous quarter. The NPL rise came mainly from the commercial and manufacturing groups and small enterprises, he said.
The gross rate of NPLs to total loans inched up to 2.38 per cent from the prior quarter’s 2.29 per cent. Outstanding special-mention loans totalled Bt355.6 billion, down Bt10.6 billion from the first quarter, declining to 2.72 per cent of total lending from 2.81 per cent at the end of the first quarter.
Commercial banks set aside more loan-loss provisions consistently to deal with drops in loan quality, reaching a provision rate of 165.1 per cent.
With higher provisions and lower net interest margins (NIM), commercial banks have seen drops in net profit. Their combined net profit was Bt53.3 billion. NIM declined to 2.5 per cent.
Commercial banks’ capital base totalled Bt2.09 trillion on the back of rises in accumulated profit, capital increases and issuance of financial instruments, which were counted as Tier 2 capital. The commercial banking system’s capital-to-risky-assets ratio (also known as the BIS ratio) and Tier 1 capital ratio rose slightly to 16.8 and 14.0 per cent respectively.
