Kraithip Krairiksh, TMB Bank's chief operating officer, said the bank would review the country's GDP growth and the bank's loan growth target before announcing a new forecast in July.

The bank's GDP growth is currently projected at around 4.5 to 5 per cent, while its loan growth target is 8 to 9 per cent, projecting new lending of Bt50 billion. Kraithip said that because the bank normally reviewed its plan every six months a new projection for next year would also be given in July.

"Several internal risk factors including interest rates, the rise in oil prices, a stronger baht and political uncertainty will affect the bank's loan growth target and interest income for this year. Thus, the bank plans to adjust its revenue structure by boosting fee income," he said.

Kraithip said the absence of an official government had affected the fiscal budget withdrawal. As a result, the bank is concerned about the impact on the construction sector.

"As the country's new election will be held on October 22, business operators mostly expect it to affect the country's GDP growth this year," he said.

Besides, with a stronger baht and oil-price increases, the bank is also closely monitoring debtors, particularly in the export sector and businesses affected by the price of oil.

Although the loan payment ability of TMB Bank's debtors in these sectors has fallen, they are still able to service their debts, he said.

Kraithip said domestic interest rates were still on the increase and the average minimum lending rate at banks may climb to 9 per cent this year.

Jada also said that while new construction

projects would be affected by the political situation, she expected existing projects being paid for by the government's 2006 fiscal-year budget to run smoothly.

All banks will have to adjust their businesses as economic conditions change, said Jada.

Somruedi Banchongduang The Nation