Time to update our charts about… credit.
You know the motto : credit is the Grand Master Flash. The blood that flows into the veins of the Green Shoots’s Economy.
No credit = no money = no honey. 😉
This is why the clowns all the over the world are so totally obsessed with credit. They want you and the businesses to eat, to swallow, to digest credits, the more is the better.
Credit is the super charged drug for an inane and twisted economic system.
Anyway, enough of the big words. Let’s go back to our study : Thailand.
Total outstanding credit (at commercial banks) is going up. Total in january 2010 : 7 926 billions THB.
Party time Miam Miam !
But… credit for businesses is going down. I mean it’s obvious : the recovery is so strong, the Green Shoots are so Green that companies don’t need credit. They don’t have to invest. 😉
Individuals ? Going up very slightly. The big question mark is the group “Domestic Banks and Financial Institutions” that is responsible for the growth of total credit.
Let’s have a look inside this group.
60 % of the total outstanding credit amount of the group “Domestic Banks and Financial Institutions” = “Specialized Financial Institutions”, according to the BOT. Great. I mean, it’s very clear. 😉
What are they ? Who are they ? I don’t have a clue.
If we look at the weight of each group. Businesses represent now 45 % of the total outstanding credit at commercial banks (versus 60 % 4 years ago). Individuals, flat at 29 %. And we see the strong growth of the group “Domestic Banks and Financial Institutions” (20 % in february).
So let’s recap and what we should think about this ?
-commercial banks and “financials institutions” are borrowing from… commercial banks.
-is it a way to blurr the situation, to prevent a honest assessment, or to makeup the statistics ?
-or is the proof that the system is perverted : banks are reluctant to give loans to businesses (too dangerous, because of the crisis)… they prefer to fuel the money into weird financial black boxes ? We don’t have indication on how the money is used after by those “Domestic Banks and Financial Institutions”.
-or is it the illustration of an evolution of the thai financial system : commercial banks are stepping back, and they let “specialized institutions” to deal with customers ?
I don’t have the answer.
I could just say : being old school, I still believe that a bank that doesn”t give a credit (because it can’t or because it refuses) to a business… is not a healthy sign.
A last one, before to hit the road :
(I didn’t represent the % of growth year on year of the group “Domestic Banks and Financial Institutions” on this chart, because It would be way too high). Businesses are still down 7,7 %, compared to january 2009.
(Source Bank Of Thailand, table FI_CB_015_S3).