According to finance permanent secretary Sathit Limpongpan, there has been progress on ACL sale. According to the process, a proposal will be submitted to the finance minister, which if approved would be sent back to the Bank of Thailand. The deal is currently pending for the finance minister’s approval. Meanwhile, finance minister Korn Chatikavanij said he should approve the deal in couples of days and that all parties should benefit from such

transaction.

The Small and Medium Enterprise Development Bank of Thailand plans to aggressively expand and approach more SMEs nationwide to increses its total loans by Bt30b from Bt56b last year. (The Nation)

Three banks have agreed to lend General Motors (Thailand) Bt13.5b to finance two vehicle programmes and construction of a new diesel-engine plant in Rayong province. Chansak Fuangfu, vice president for wholesale business at Bangkok Bank (BBL), said his bank and Siam Commercial Bank (SCB) were joint lead arrangers, lending Bt6b apiece, while Tisco Bank would provide Bt1.5b. The loan term is seven years. (The Nation)

Kasikornbank is expanding its collaboration with China Minshen Banking Corporation (CMBC) to increase its Chinese loan portfolio. The two financial institutions yesterday signed an agreement on business co-operation by merging networks to allow cross-border financial services among the two banks. Both parties want lending of 6 billion baht this year to Chinese small and medium-sized enterprises. KBank chief executive officer Banthoon Lamsam said its loan portfolio under the joint credit provided for China’s SMEs measured around Bt900m.

Thailand’s stock market expects the launch of four exchange-traded funds in the first half of the year, tracking banking shares and prices of commodities like agricultural goods and gold. (The Nation)

Moody’s Investors Service has revised the outlook for Thai banks from negative to stable, reflecting improved credit conditions. Moody’s forecast economic growth of 3-5% for Thailand in 2010, following a contraction of 3% in 2009. Credit growth is projected at 5-10%, following a contraction of 2% last year. It said Thai banks would benefit from the expansionary government budget and stimulus spending. Moody’s noted that the crisis had had a limited impact on Thai banks, with asset quality stable and many banks reporting declines in non-performing loans. Profitability has also remained strong. “However, the sector’s resilience and ability to absorb the adverse effects of the global financial crisis could be fractured by the country’s fragile political environment,” it said.

Local bankers hold out little hope of recovering billions of baht worth of loans made to the defunct rice exporter President Agri Trading. Nine banks have filed claims with the Legal Execution Department after the Bankruptcy Court earlier this month placed assets of the company and its managing director, Apichart Chansakulporn, into receivership. The court order took effect on Jan 12. Bank claims against President Agri are: Bt2.2b to TMB Bank, Bt2b to Krung Thai Bank, Bt1.7b to CIMB Thai, Bt1.4b to Bangkok Bank, Bt1b to HSBC Thailand, Bt580m to United Overseas Bank (Thai), Bt220m to the Islamic Bank of Thailand, Bt140m to Kasikornbank and Bt29m to ACL Bank.

According to finance minister Korn Chatikavanij, a Korean investor is interested in bidding for SCIB shares. The FIDF is currently in the process of divesting its 47% holding stake in SCIB.

The Bank of Thailand said lending by commercial banks is expected to grow 9.8% this year, boosted by a recovery in the economy. Lending started to pick up late last year and the trend should continue, assistant governor Sorasit Soontornkes told reporters yesterday. The combined loan portfolio of the banking sector contracted 1.78% last year as demand for new money declined amid the economic recession, he said.

Bank interest rates could increase by 0.75 percentage points throughout next year as central bank rates will rise as the economy improves, says Kasikornbank president Prasarn Trairatvorakul. The Bank of Thailand is expected to increase its benchmark one-day repurchase rate by 50 to 75 basis points (hundredths of a percentage point) over the year in response to mild inflationary pressure and a weak economic recovery.