Thai banks' consumer loan segment feeling the pinch of slower consumption

Sector loan growth also flat.

According to Maybank Kim Eng, Thai banks with consumer loans feeling the pinch of slowing consumption.

BAY posted the highest drop of 2%, followed by TISCO and SCB dropping 1.0% and 0.7%, respectively. KKP and TCAP reported relatively flat overall loan growth of +0.1% and +0.2%, respectively.

Here's more:

Sector deposits relatively flat (-0.1% MoM). TISCO and SCB’s deposits declined by 5% and 2%, respectively. This is in line with the management’s guidance that they would like to reduce the funding costs to maintain NIM this year.  

KTB, KBANK and TMB posted strong loan growth in Jan 14. We saw strong growth for commercial loans (corporate and SMEs) in Jan. 

KTB, KBANK and TMB, which focus on commercial loans, registered the highest loan growth of 1% MoM while BBL reported a decline in loans of 0.6% due to corporate loan repayments. 

What’s Our View

Slowdown evident. As the political unrest is prolonged economic growth is dampened. January sector loan growth was flat MoM compared to the positive loan growth over the last three years: 0.6-1.2% during 2011-2013.

We believe commercial loans will still grow but at a very moderate pace while retail loan growth should weaken, especially the hire purchase segment, due to the pre-existing high household debt. Note that loan activity tends to slowdown in Jan due to the working capital loan repayments from the peak level in December.

However, this year is a bit different as some banks are reporting mild contraction.