CIMBT has hopes for recovery in quarters ahead

CIMB Thai Bank (CIMBT) says the country’s GDP shows signs of recovery the next few quarters after bottoming out in the second quarter at -14%.

Exports in the second half of the year will likely contract by 10% because of reduced shipments from the ongoing pandemic affecting supply chains, said Amonthep Chawla, CIMBT’s executive vice-president.

“We still maintain our GDP growth forecast this year of -8.9%,” he said.

Mr Amonthep said Thailand and regional economies are likely to recover faster than Western countries next year, driven by domestic consumption, especially Vietnam and Indonesia with their large populations, combined with increased intra-regional trade among Asean members.

For Thailand, government spending is still a key driver of the economy, while the pandemic remains a predominant risk factor until the roll-out of a vaccine.

Pornchai Padmindra, senior executive vice-president of CIMBT, said the bank’s loan growth in the second half of the year is estimated to be higher than in the first half (when growth was 3-4%).

“We will see companies retrain their staff to be skilled workers to survive the challenges under the outbreak, which include creating value-added products and focusing on companies’ core strengths, investing in other countries and retraining employees,” he said.

Many companies are using this opportunity to shift their capital structure from short- to longterm debt, while eliminating the maturities mismatch.

The country’s economic situation is driving small and medium-sized businesses to help each other survive.

Mr Pornchai said now is a good time for mergers and acquisitions because many companies are seeking an exit from the financial strain.

“There have been many M&A conversations for future industry consolidation this year, but successful deals will be picked up next year because the price gap between buyers and sellers is still wide,” he said.

Sectors that are highly likely to see M&A deals are food/beverage, resources/energy and hospitality.

‘‘ We still maintain our GDP growth forecast this year of -8.9%.

AMONTHEP CHAWLA

Executive vice-president, CIMBT