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Chart of the Week: These are the two culprits behind Thai banks' slow loan growth
It fell to as low as 3% recently.
Maybank Kim Eng reports that the slowdown in overall loan growth was mainly due to the weakness in the large corporate segment. But interestingly, there is a solid demand from this sector. It's just that banks tightened credit standards, therefore causing loan approval rates to fall.
"Two reasons are behind this surprising phenomenon. First, slower economic growth is discouraging banks from taking risk. Second, banks find it difficult to compensate for the higher risk for this client group. The latter reason is not frequently mentioned in the market," says Maybank Kim Eng.
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