The Bank of Thailand has expressed its confidence that public sector support will force commercial banks to lend more, and at the same time it reported stability in the commercial banking system during the third quarter.
BoT Senior Director Don Nakhonthap said yesterday that commercial banks’ lending had a tendency to grow better while reserves and funds were still in a high level. Although the ratio of non-performing loan had increased, especially in large businesses, he noted a slight increase in consumption and investment in the private sector had caused lending to expand since the second quarter by 5.3 percent.
Loans for the business, financial, construction and commercial sectors grew in the third quarter but loans for SMEs as well as all types of consumption loans slightly dropped.
The total profit of commercial banks stood at around THB 50 billion during the third quarter, decreasing from the same period last year of 7 percent.
Don said he believed that the government’s economic stimulus measures would motivate commercial banks to provide more loans.