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Published on September 28, 2007

Executive vice president Boontuck Wangcharoen said yesterday that in the first eight months of the year, the bank's commercial loans had grown only 5-6 per cent, or some Bt30 billion, far behind its target for the entire year of 15-16 per cent, or Bt70 billion.

However, this is still good considering that commercial loans in the whole industry showed no growth in the period.

The bank's commercial business consists of loans to corporates and to small and medium-sized enterprises.

In the period, Kasikornbank's corporate loans grew only 2 per cent versus the whole-year target of 12 per cent, and its SMEs increased 8 per cent against the targeted 18 per cent for the year.

"Although the bank's lending

in the first eight months showed poor performance, we hope the growth rate will reach double digits by the end of the year. This is because of better economic signs in the second half, after the country's political situation improved," he said.

With the clearer political picture, loan takedowns by borrowers in the second half should also increase compared with the first half, which was only 30-40 per cent of approved loans, Boontuck added.

Once the general election is held and the new government is formed early next year, the country's economic outlook will brighten, he said.

Even now, businesses are ready to expand as

 their average capacity utilisation has reached 75 per cent. Private investment is expected to recover next quarter in anticipation of an economic recovery next year.

Although interest income from commercial loans will be disappointing this year, fee income will increase, particularly from corporate customers, he said.

 For example, Kasikornbank is the leader by volume in bond underwriting.

However, the bank's total revenues from the commercial-loan business for this year will be below target, he added.

Somruedi Banchongduang

The Nation