Chart, commercial banks : total credit and type of debtors… first red lights ?

(Source Bank Of Thailand, table FI_CB_015_S3).

Time to update the charts about total credit and type of debtors, at commercial banks.

The total amount (outstanding) of credit was 7 465 billions THB in january, lower than december (7 549 billions, 84 billions less). Year on year (compared to january 2008) we still have a very strong growth : 18 % !

(Credit = Overdraft + Loans + Bills)

creditjan91

credit93gif

Now a view (still in % year on year) per type of debtors.

credit92

Now a view, per amount and type of debtors.

credit94

The push in january 2008 (after the elections, with the government of Samak) is obvious.

There is still no credit crunch in Thailand… The growth of credit remains strong, if we compare with last year.

It will change of course. It has to change

I note one thing that could be a bad sign : in january, total credit for business went down 50 billions THB, compared to the previous month… We have to go back to january 2007 (after the Coup) to find a – 49 billions monthly difference.

Exactly the same for credit to individuals : minus 11,6 billions in january… the last negative difference was in january 2007.

My feeling : january 2009 could be the official beginning of the infection of the thai credit system (on the commercial banks side) by the recession virus.

My point : since january, the situation of the economy has worsened. It’s a fact (less exports, fall of production, unemployment on the rise, less consumption)… how in those conditions the banks could (or would be willing to) lend more ?

The same principle applies everywhere in the world : banks were reckless by giving cheap money before… now the bozos at the government (and on the streets) complain that the banks are too cautious !

They don’t understand that it’s meaningless to give credit during a full blown recession. The risks are just too high. Credit to a company to build new factory ? To make what and to sell to who ? Credit to someone who is unemployed to build a new house ?

So what do we have left ? Credit to please the clowns, the politicians. To save jobs at zombie companies during a certain period of time. But for how long and for what results ?

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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