Loan demand will pick up in the second half of 2017.
Overall loan growth should be sluggish in 2Q17, given the subdued loan growth in April and May, according to UOB Kay Hian. Loan grew 0.5% mom in May, bringing 5M17 loan growth to 0.7% yoy.
"However, we are seeing a slight improvement in growth momentum in May, which rose 0.5% mom vs 0% mom in March and +0.4% mom in April. According to channel check with banks, key loan growth driver so far has been corporate loan demand. Going forward, banks expect loan demand to pick up in 2H17, underpinned by the progress of infrastructure projects. For the year, we forecast loan growth at around 5%," added UOB Kay Hian.
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