No thanks to the sharp drop in interbank and derivative assets.
According to BMI Research, the Thai banking sector is going through a benign deleveraging process, with total assets relative to GDP continuing to decline due to a combination of robust real GDP growth and weak demand for credit due to a highly leveraged consumer sector.
Here's more from BMI Research:
Total asset growth hit a new cycle low in March, coming in at 0.0% y-o-y. The main cause of the stagnation in March was a sharp drop in interbank and derivative assets, but the overall slowdown in asset growth reflects the continued decline in lending growth, which came in at just 2.9% y-o-y.
Loans to individuals, in particular, have been slowing sharply due in large part to the drop in lending for cars andmotorcycles after the sector saw a surge in debt from 2005 to 2013. Loans to domestic banks and financial institutions continue to contract, meanwhile.
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