Banks expect a lower loan growth next year

Owing to the slowdown in the economy Bangkok Bank BBL.BK, Thailand’s top lender, expects a growth of only 5 percent in lending next year, down from expected growth of 8-9 percent this year.

“We expect loan growth of 5 percent, which is based on an economic growth forecast of 2-3 percent,” President Chartsiri Sphonpanich told reporters.

The bank, which has $31.38 billion in loans, said that its loans grew 13.1 percent in the first nine months of this year.

The scenario at the Thai banking industry is not really very bright as the lull in the world economy would cut demand for new loans, added to the political uncertainty and unrest at the domestic front weighing on business confidence.

Smaller banks also expect lower loan growth next year, with fourth-ranked Siam Commercial Bank SCB.BK expecting 5 percent compared with a 10 percent target this year, which it has said it would probably miss.

Number three Kasikornbank KBAN.BK has said it would cut its projection for 2009 from a previous target of 6-7 percent. Its loans are forecast to grow 17 percent this year.

Thailand’s economy is forecast to grow 3-4 percent in 2009, according to the National Economic and Social Development Board, which compiles the official data, but economists and officials are scaling down estimates, especially after the recent blockade of Bangkok airports, which will hurt tourism.