Thai banks' household loans under watch

The Bank of Thailand said it was keeping a close watch on credit for the purchase of cars and condominiums.

Anupap Kuvinichkul, senior director of the BOT's Financial Institutions Strategy Department, said commercial banks' lending for household consumption rose 21.6 percent in 2012, compared with a 15.8-percent rise in 2011. Commercial banks' whole credit expanded 13.7 percent in 2012, compared with a 15.1-percent expansion in 2011. Outstanding loans in 2012 totalled Bt9.6 trillion.

"We don't have much concern yet. However, we are emphasising the monitoring of loans for cars and condominiums. But our close monitoring does not mean these loans were not good. There are many methods of monitoring, including discussions with commercial banks or operators. We have to monitor in several aspects for various information for analysis," Anupap said.

Business lending in 2012 expanded by 10.6 per cent, slightly lower than the 2011 expansion of 14.8 percent.

Credit for small and medium-sized enterprises also recorded a slower expansion at 14.1 per cent than the14.4-percent rise a year ago.

Anupap said the overall growth of all types of lending showed no cause for concern. Despite a sharp rise in consumption credit, he expected minimal impact from non-performing loans (NPLs) if the Thai economy continues to register satisfactory expansion. He conceded that the central bank had been keeping a close eye on auto instalment loans, which grew 39 per cent last year, and credit for condominiums, up 24.4 per cent.

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