Bangkok Bank’s China arm expects robust loan growth

Bangkok Bank China (BBC), a wholly owned subsidiary of Bangkok Bank (BBL), is maintaining its double-digit loan growth target for this year, saying the US-China trade dispute will not have an adverse impact on loan demand.

Most of the bank’s customers are not worried about the trade spat, because they supply products for domestic consumption, said BBC chief executive Suwatchai Songwanich.

Some customers, though, particularly raw material importers from the US, will likely feel the pinch both directly and indirectly from the protectionist actions, he said.

The bank has prepared for more uncertainty in the second half.

Many clients are searching for new import markets to replace the US, and the bank is ready to support them, Mr Suwatchai said.

Despite t he business adjustment, the bank’s customers kept their business target and financing requirements for this year unchanged, he said.

BBC set an aggressive loan growth target of 15% this year, assuming Chinese economic growth in excess of 6.5%. The bank’s lending grew 11-12% in the first six months this year, and positive loan demand continues into the latter half.

Several credit facilities are in the pipeline, expected to be drawn down in the second half, making the loan growth target reachable, Mr Suwatchai said.

“If the US-China trade rift is prolonged, some Chinese investors could relocate their production base to Thailand and other Asean countries to ward off the negative impact,” he said.

But Thai exporters under China’s supply chain, especially electronics and electric parts makers, need to be closely monitored during the next phase of US protectionist responses, Mr Suwatchai said.

BBL, Thailand’s biggest lender by assets, has the largest overseas network among its industry peers, with 32 foreign networks in 15 countries.

BBC, which operates under a local banking licence, has five branches in China — in Shanghai, Beijing, Xiamen, Shenzhen and Chongqing — and a sub-branch in the Shanghai Pilot Free Trade Zone.

Chinese customers represent BBC’s largest portion at 40% of loans outstanding, followed by Thais at 30% and those from other Asean countries the rest.

Some of BBC’s Chinese clients invest in Thailand to capitalise on the country’s robust economic growth.