News Column

StanChart sees loan boost

August 25, 2014

By Somruedi Banchongduang, Bangkok Post, Thailand

Aug. 25--Standard Chartered Bank (Thai) expects its lending to take off next year with improvement in private investment, driven largely by the government's massive infrastructure investment plan.

The bank projects flat loan growth this year as the recent political deadlock crippled the country's economic growth, said Lyn Kok, president and chief executive.

The economy has gradually improved after the army's seizure of power on May 22.

She said the speedy approval of investment incentives by the Board of Investment (BoI) and improving foreign direct investment and exports could also propel the country's economic revival.

Standard Chartered Thai projects Thai GDP growth of 3.5% this year before accelerating next year.

The local unit of the UK-based bank is focusing more on asset returns rather than loan growth in line with the bank's business structure and strategy. Normally, its total loan growth is marginal every year.

"Our return on risk-adjusted assets is around 20%, above the industry's level, and it could increase next year in line with greater business opportunities amid the positive economic outlook," she said.

However, the bank's return on equity is around 10%, still below the industry.

Mrs Kok, also chief executive for Greater Mekong Sub-region (GMS), said business opportunities have risen across the region, thanks to the nascent economies of Cambodia, Laos, Vietnam and Myanmar. Thailand is a financial hub for Standard Chartered Group in this region, helping customers who want to expand their business here.

The international banking group has a presence in all 10 Asean countries. For the GMS, it has operated in Vietnam for 110 years, Laos 18 years, and over 20 in Cambodia as a representative office. It plans to upgrade its Cambodia operation to a branch next year.

The bank reopened a representative office in Myanmar last year but has not applied for a banking licence yet, saying it is not the right time.

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Source: Bangkok Post (Thailand)

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