Total lending in the banking industry in the first quarter grew for the first time in two years, driven by working capital loans aimed at helping customers manage rising costs.
Total loans for banks posted marginal growth of 0.2% year-on-year for the period, the first growth in two years.
The expansion was mainly driven by working capital lending, as banks supported customers with additional liquidity amid the ongoing energy crisis, said Somchai Lertlarpwasin, assistant governor for financial institutions supervision at the Bank of Thailand.
Rising energy costs stemming from the war in the Middle East led banks to offer additional liquidity to help customers cope with higher operating expenses.
Project finance remained sluggish, in line with slower economic growth.
"Working capital accounted for around 80% of new lending in the first quarter of this year. However, in terms of total outstanding loans, working capital represented around 45%, compared with 55% for term loans," he said.
According to the central bank, the loan growth was primarily driven by corporate lending, which expanded by 2.7% in the first quarter.
Small and medium-sized enterprise loans contracted by 4%, marking a decline for the 15th consecutive quarter. Consumer loans edged down slightly by 0.7%.
For retail lending, the contraction was led by auto loans, which declined by 7.5%, while credit card and personal loans increased slightly by 0.2% and 0.1%, respectively. Mortgage lending grew by 1%.
In a separate development, Mr Somchai said two successful applicants for virtual bank licences requested delays to their business operations.
As a result, he said the regulator expects to grant one additional licence in 2026 and another in 2027.
"The gradual approach to granting virtual bank licences, one applicant at a time, does not affect the broader objective of promoting financial inclusion among underserved and unserved groups," said Mr Somchai.
"The central bank primarily considers the readiness of each applicant when issuing licences."
Clicx Bank, jointly established by Krungthai Bank (KTB), Advanced Info Service (AIS), and PTT Oil and Retail Business (OR), recently announced it is preparing to launch services in June this year after receiving its licence on May 14.
In June last year, the central bank announced three successful applicants to establish virtual banks: the AIS-KTB-OR consortium; ACM Holding, backed by the Charoen Pokphand (CP) Group; and the SCB X consortium, which includes KakaoBank and WeBank.
CP All, a subsidiary of CP Group, is scheduled to hold an extraordinary shareholders' meeting on May 29 to consider placing its three subsidiaries under the Ascend Bank structure.
