Banking loan growth to slump in Q2

Loan growth in the banking sector is expected to slow in the second quarter this year due to rising uncertainty surrounding global trade policies, according to an executive at the Bank of Thailand.

- SOMRUEDI BANCHONGDUANG

In the first quarter of 2025, total loans in the banking sector contracted by 1.3% year-on-year, marking the third consecutive quarterly decline.

This was driven by contractions in both business and consumer loans, which fell by 0.8% and 2.2%, respectively.

Several loan segments shrank, most notably auto hire-purchase loans, which dropped by 10.2%, followed by loans to small and medium-sized enterprises (SMEs) declining by 5.5% and credit card loans downs 1.9%.

However, corporate lending posted modest growth of 1.5% in the first quarter, while mortgage and personal loans also recorded marginal increases of 0.2% and 0.3%, respectively, said Suwannee Jatsadasak, assistant governor at the central bank.