The monthly growth was led by lending to the food and energy sectors.
Thailand’s bank loans extended their run after rising 4.7% YoY in Q1 on the back of improved lending to SMEs in several business sectors, according to the central bank.
Corporate loans, which accounted for 66.7% of the banking system’s total loans, edged up 3.6% YoY led by lending to SMEs in the energy and food industries. Loans to the real estate sector also expanded driven by demand from corporate businesses and SMEs in line with financing through debt securities and equity.
Consumer loans also increased 7.1% thanks to demand for auto financing. The rise was consistent with improved car sales after the five-year lock in period of the first-car buyer scheme ended, coupled with a large number of new car launches.
Credit card and personal loans also expanded 5.3% and 6.9% respectively.
Housing loans also increased 5.8% as a growing number of residents aim to score a spot in the country’s property ladder, prompting the Bank of Thailand to sound an alarm urging banks to retain risk management practices when issuing mortgages.
The banking system’s bad loan ratio inched up from 2.91% to 2.92% in Q1 to $13.83b (443b baht) amidst asset deterioration in SME and housing loans. The banking system’s total provision increased to $19.42b (622b baht), resulting in the higher ratio of actual to regulatory loan loss provision at 176%.
Capital fund of the banking system was at $75.99b (2,434b baht) which resulted in a slight decline in capital adequacy ratio (BIS ratio) and common equity Tier-1 ratio (CET1 ratio) to 18.0% and 15.4%, respectively
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