Thailand banks’ loans up 5.3% in Q3

Corporate loans rose from a year ago and consumer loans also grew.

Thailand banks’ loans grew 5.3% in the third quarter of 2022, slowing from the 6.3% in the previous quarter, according to data released by the Bank of Thailand (BOT).

The slower pace was mainly due to loan repayment made from government and banks’ portfolio management, BOT said in a press release.

Overall, Thailand’s banking system reported a net profit of THB60.4b in Q3, a 56.8% increase compared to the same quarter in 2021, thanks to loan expansion that pushed up net interest income, coupled with lower provisioning expenses.

However, compared to the previous quarter, net profit declined primarily due to lower non-interest income from the seasonal effect of dividend income last quarter, while net interest income increased, BOT said. 

Corporate loans rose by 6.1% compared to the same quarter in 2021, which BOT said was thanks to an expansion in large corporate loans to support financing needs in line with the improving recovery of economic activities. 

This was offset by a contraction in loans extended to small and medium enterprises or SMEs, blamed at the scheduled repayment of soft loan facility.

Meanwhile, consumer loans expanded 3.9% in all loan types. 

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“Personal loans continued to grow along with the recovery of private consumption. Meanwhile, mortgage loans expanded following an increase in housing demand for both low-rise and high-rise residential properties, partly due to the housing stimulus measures which will end in 2022,” BOT stated.

“Auto loans increased consistent with growth in domestic car sales. Credit card loans continued to grow in line with an increase in credit card usage, together with last year’s low base of credit card spending during lockdown,” Thailand’s central bank added.

In terms of loan quality, gross non-performing loans (NPL) decreased to THB502.7b, equivalent to an NPL ratio of 2.77%.

However, the ratio of loans with a significant increase in credit risk to total loans rose to 6.26% from 6.09% in the previous quarter.