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Thai Kasikornbank raises loan loss provisions on rising household debt
October 1, 2014 / 5:03 AM / 3 years ago

Thai Kasikornbank raises loan loss provisions on rising household debt

BANGKOK, Oct 1 (Reuters) - Thailand’s fourth-largest lender Kasikornbank said on Wednesday it has slightly raised its loan loss provisions to 0.85 percent of its loan portfolio this year, from 0.80 percent last year, due to rising household debt and the weak economy.

However, the bank’s non-performing loans (NPL) will be stable at around 2.1-2.2 percent of total lending at the end of this year, versus 2.14 percent at the end of June, President Teeranun Srihong told reporters.

“We are assessing the impact of household debt on purchasing power and the economy,” Teeranun said.

The bank, which earlier said it expected loan growth of 9 percent for 2015, is reviewing its lending target for next year pending the government’s economic stimulus plans and progress in infrastructure spending, he said.

Kasikornbank maintained its loan growth target of 6-7 percent this year thanks to demand from companies in the construction and utility sectors, he said.

Thailand’s economy has been weakening since the fourth quarter of 2013 on the onset of domestic political unrest, which hit demand for lending.

Household debt, now at about 80 percent of the country’s gross domestic product, has risen sharply over the past several years. (Reporting by Manunphattr Dhanananphorn; Writing by Khettiya Jittapong; Editing by Kenneth Maxwell)

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