Consumer loans increase 14%

Although the banking system's credits expanded 15.14 per cent to Bt6.8 trillion in the first quarter, they were driven mainly by consumer loans rather than business loans for economic ventures.

Consumer loans registered Bt1.4 trillion, rising 13.81 per cent year on year. Only credits for the agriculture, forestry and electricity-, gas- and water-supply sectors rose in double digits, while those for other sectors grew slightly or contracted, Bank of Thailand (BOT) data indicated.

Credit growth showed a gloomier picture than overall private investment. The Private Investment Index rose 7.2 per cent year on year in the first quarter but contracted 0.6 per cent quarter on quarter.

Assistant governor Krirk Vanikkul said that although investment would pick up, as reflected in an increase in loans for investment projects, economic recovery was not yet evident throughout the system.

"Some businesses perform well at a certain time, but some do not," he said.

BOT data show loans for the manufacturing sector increased only 2.6 per cent to Bt1.6 trillion in the first quarter. This was quite flat compared with the previous quarter.

Credits for the fishing and mining and quarrying sectors shrank 8.34 and 8.62 per cent to Bt14.8 billion and Bt19.2 billion, respectively.

Moreover, loans for the construction sector fell 3.72 per cent to Bt177.6 billion in the first quarter despite an improvement in housing loans. In the first quarter, housing loans expanded 11.65 per cent to Bt741.4 billion. However, property loans for other purposes dropped 17.16 per cent to Bt1.7 billion.

Krirk said housing loans grew in double digits from last year but at a slower pace from the previous quarter.

While credits for production sectors showed depressed figures, consumer loans showed impressive growth. Hire-purchase loans for cars and motorcycles registered Bt307.6 billion, up 28.7 per cent year on year.

Krirk insisted the banking system's non-performing loans (NPLs) remain low, and its ratio compared with total loans contracted from the fourth quarter.

"We continue to monitor the figures closely and will see what the NPLs will be in the second quarter," he said.