KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
Thailand’s commercial banks have reported their fourth straight quarter of loan contraction, a worrying signal for the country’s economic outlook.
Loan Growth Weakness
Bank of Thailand (BOT) said outstanding loans shrank 0.9% in April–June, following a 1.3% drop in the first quarter.
Non-performing loans (NPLs) inched higher to 2.91% (THB554.9 billion / RM72.1 billion), up slightly from 2.9% in Q1.
Lending to SMEs and consumers remains weak as banks tighten credit standards to control bad debt.
BOT’s assistant governor Suwannee Jatsadasak warned that loan demand will likely remain subdued in Q3, with households already saddled with the highest debt ratio in Southeast Asia.
Economic Headwinds
Thailand’s economy grew just 2.8% in Q2, down from 3.2% in Q1.
Weakness comes from US tariffs hitting exports and declining tourist arrivals.
Thai firms remain cautious, focusing on deleveraging debt rather than new investments.
The BOT has cut its policy rate by 100 bps since October to support growth, but credit momentum remains sluggish.
Banking System Still Resilient
Despite slower lending:
Large corporate loans expanded in Q2.
Profitability rose thanks to seasonal dividend income.
Banks maintain high capital, liquidity, and loan-loss provisions, providing buffers against global trade risks.
However, net interest income fell, squeezed by rate cuts, smaller loan books, and debt relief measures.
What It Means for Investors
Growth Risk: Weak credit demand highlights economic slowdown risks, especially in SME and consumer sectors.
Bank Strength: Thai banks remain well-capitalized, limiting systemic risks despite rising NPLs.
Policy Watch: More monetary easing or stimulus could follow if growth continues to slide.
Equity Impact: Bank earnings may stay under pressure due to lower loan growth and tighter margins, though dividend income provided some relief.
Bottom Line: Thailand’s banks are strong on paper, but the economy’s weak lending cycle and high household debt pose downside risks to growth. Investors should expect cautious banks, slower credit expansion, and pressure on consumer-driven sectors.
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