CHIANG MAI : Bangkok Bank foresees loan expansion, supported by improving domestic investment and consumption, as the key factor to drive Thailand's economic growth next year, said executive chairman Kosit Panpiemras.

The bank's loan growth next year is expected to be higher than this year's target of 4-5%. Although it expects conservative loan growth because of economic uncertainty, it booked satisfactory levels from the start of the year, mainly supported by the dramatic growth of the country's exports.

Bangkok Bank projects Thailand's gross domestic product to grow by 7-8% this year, partly due to the base effect.

As a result, the bank expects to achieve its loan growth target this year despite negative local and global factors, particularly the country's political turmoil in the first half of the year.

The bank has expanded loans in some segments, especially small and medium-sized enterprises and mortgages.

Mr Kosit forecasts Thailand's GDP will return to 4-5% next year.

Investment by both the public and private sectors, allied to domestic consumption, would be the key factors driving Thailand's economy. The role of another key economic engine, exports, would decline next year because of global economic uncertainty and foreign exchange volatility.

He said Asia would play a stronger economic role and support world economic growth. Asian co-operation between will support the region's economic growth and ease foreign exchange risks.

Overseas investment in the region would provide Thai business operators with an opportunity. Large companies have expanded in the region and the bank would support customers for overseas investment, Mr Kosit said.

Bangkok Bank president Chartsiri Sophonpanich said the bank was ready to use its strong regional networks to provide financial support and other help to clients seeking to expand overseas. The bank has 22 networks in 12 countries, with 20 networks in Asia. It recently opened three branches in Malaysia.

With an improving economic outlook next year, the bank expects to reduce provisions for loan losses to normal. It decreased its loan loss reserves to an average of 1.7 billion baht quarterly for the first three quarters of this year and may lower the figure next year, he said.

Writer: Somruedi Banchongduang
* Published: 2/11/2010 at 12:00 AM
* Newspaper section: Business