SME loans and mortgages will grow at a slower pace.
The loan books of banks in Thailand are tipped to expand at a slower pace of 4.1% by end-2019 from 5.1% in the previous year, according to a report from Maybank Kim Eng. Loan books are expected to grow slightly to 4.8% by 2020 and 5.2% by 2021.
SME loans are tipped to grow at a weaker pace as banks remain wary of extending credit to the sector given their vulnerability in a weakening economy, according to Jesada Techahusdin, CFA at Maybank Kim Eng. SMEs account for a little over a third (33.6%) of Thailand banks' overall loans.
Moreover, mortgages are also tipped to slow amidst the government's punitive measures that kicked into effect on 01 April. For property values of more than $320,000 (THB10m), the central bank has capped LTV ratios at 80% for first and second mortgage loans and 70% for the third. The respective ratios used to be 80% for all contracts.
Lending gains for the year will be driven by corporate and auto segments although banks are expected to continue lending for used-car purchases and car refinacning than new purchases.
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