UOB (Thai) cuts 2009 loan growth target to 0%

"Normally we lend some Bt1 billion a month but in the first quarter we extended a mere Bt1 billion in loans," Thanachai Thanachaiary, senior executive vice president for the personal financial services group, told reporters yesterday.

The bank's corporate loans in the first three months took the hardest hit as companies switched to selling debentures to the public, he said.

The gloomy economy, tightened bank loan approvals and intensified competition in the industry could also be blamed for the drop-off in lending.

"We have to keep an eye on the situation month-by-month to see if our loans will contract this year. Even with loan growth of zero per cent, we're still happy as we're now concentrating on quality rather than quantity," he said.

The small bank has a policy to take care of its existing customers rather than aggressively seek new ones.

The bank's outstanding loans at the end of last year amounted to Bt160 billion, with 40 per as corporate loans and the remainder retail loans.

Deposits also totalled Bt160 billion at the end of last year.

With the bank's policy to focus on loan quality, its credit card holders would be halved this year from 120,000 to 60,000.

The bank's non-performing personal loans jumped from 45 per cent of total loans in 2007 to 6 per cent in 2008.

The bank's overall non-performing loans in 2008 were at 6 per cent and it expects to maintain that level.

The bank last year swung back from a net loss of Bt90 million in the previous year to a net profit of Bt1.37 billion.

Early last month, TMB Bank also forecast that its corporate loans would flatten out this year in the bestcase scenario.