KBank trims its China branch loan goal by 27%

Source: Bangkok Post, ThailandAug.迷你倉 26--The Chinese branches of Kasikornbank (KBank) have cut this year's loan growth target in response to moves to guard against potential non-performing loans as that country's economy sags.Pipit Aneaknithi, an executive vice-president and head of the Chinese business division, said Thailand's fourth-largest lender cut its lending growth target this year for its two branches in China, located in Shenzhen and Chengdu, by 27.3% to 2.2 billion yuan (11.4 billion baht) from 2.8 billion.China's economy expanded by 7.5% year-on-year in the second quarter following 7.7% in the first quarter and 7.9% in last year's fourth quarter on weak global demand and economic reform of fast-line growth initiated by Premier Li Keqiang.The Kasikorn Research Center, a KBank subsidiary, forecasts China's 2013 gross domestic product growth at 7.6%.Mr Pipit said KBank expects its Chinese branches will achieve the revised lending growth target by next month, as the branches plan to stop approving new loans in the fourth quarter and focus on KBank's infrastructure improvement.It plans to shore up its infrastructure base in information technology systems and human resources to prepare for international trade finance business expansion next year.KBank projects文件倉an aggressive expansion of its international trade finance portfolio for Chinese branches to 5 billion baht by the end of next year from 600 million now."From now on, we want to focus on low-risk assets in international trade finance rather than loan growth to weather China's slowdown," he said.However, it will still pursue its long-term Chinese expansion plans for networks and upgrading its branch status to a full local bank.Despite concerns about the financial health of the banking and real estate sectors amid the risk of a property bubble as well as worries about the robust growth of Chinese shadow banking in recent years, Mr Pipit insisted foreign banks have hardly felt any effect due to their marginal market share of about 1.7%.Chinese shadow banking is formed largely by China's local authorities and private investors as a joint venture, allowing them to set lending rates and extend loans freely, while formal banking systems move under tight government control.Shares of KBANK closed Friday on the Stock Exchange of Thailand at 162 baht, down 50 satang, in heavy trade worth 2.85 billion baht.Copyright: ___ (c)2013 the Bangkok Post (Bangkok, Thailand) Visit the Bangkok Post (Bangkok, Thailand) at .bangkokpost.com Distributed by MCT Information Services存倉