Consumer loans outpaced industry average at 8.4%.
The sustained growth of Thailand’s economy bodes well for the banking sector as the volume of loans extended by commercial banks picked up at a faster clip at 6.3% YoY in Q3 from 5.4% in Q2, reports The Nation.
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Consumer lending rose 8.4% YoY in Q3 on the back of double-digit growth in auto hire purchases, personal loans (8.8%) and credit card loans (8.2%). Residential and business loans also grew by 6.4% and 5.2% respectively.
“We expect consumer confidence to remain on a broad uptrend, which began in July 2017, as the ongoing economic recovery continues to feed through, and this will likely be positive for consumer credit demand," Fitch Solutions said in an earlier report.
On the corporate front, lending to large business inched up 0.6% as SME lending extended its quarterly climb at 7.2%.
The steady surge in borrowing increases the likelihood of meeting the government's full-year loan growth target of 6-8%. The country's massive infrastructure drive is amongst the drivers of steady lending outlook, added Fitch Solutions, as around $14b (THB1t) of the planned $80.96b (THB2.7t) worth of projects under the Transport Action plan, has already started or will begin construction in 2018.
Despite heightened lending levels, banks were also able to maintain stable asset quality as nonperforming loan ratio held steady at 2.94% of outstanding loans by end-September, compared to 2.93% in July.
Outstanding NPls hit $13.44b (BT443b) in Q3 brought about by slippages in SME loans where the NPL ratio edged up from 4.45% in Q2 to 4.65 in Q3.
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