Krungsri delays new credit lines amid US tariff uncertainty
Thai bank chief says loan delays are due to unconfirmed tariff policies
Companies are delaying the utilisation of new credit lines due to waiting for further clarification on US tariffs following the recent announcement of a 90-day suspension period, as reported by a Bank of Ayudhya (Krungsri) executive.
Prakob Phiencharoen, who leads Krungsri’s corporate and investment banking group, stated that the bank is maintaining vigilance over corporate loan demand for the rest of the year, even though corporate loan growth reached targets in the first quarter.
Krungsri has set a corporate loan growth target of 5-7% for this year. By March of this year, the bank had already expanded its loan portfolio by approximately 5%.
Prakob acknowledged that if clients persist in delaying investment decisions due to uncertainties in US trade policy, this could impact the bank’s ability to expand corporate loans throughout the year.
Prakob highlighted that the increasing uncertainty regarding tariff policies from major global economies remains a significant challenge for corporate loan growth in 2025. Despite this, the corporate sector is still a substantial contributor to Krungsri’s overall loan growth, particularly as growth in other business areas decelerates.
Corporate loan demand remains promising, driven by both inbound and outbound investments and sustainability-focused financing programmes.
Key sectors experiencing growth include renewable energy, industrial estates, infrastructure, food and beverage, and healthcare, supported by both domestic and international operators.
Inbound investments mainly originate from Hong Kong, Taiwan, South Korea, Japan, and China. Krungsri is currently involved in several investment deals, including project finance, mergers and acquisitions, and joint ventures.
Regarding the automotive sector, Prakob noted that Krungsri has shifted its focus to the electric vehicle (EV) segment, supporting the entire value chain from manufacturers and auto parts suppliers to car dealerships. The bank is also adjusting its portfolio to balance exposure between Japanese and Chinese EV brands amidst ongoing industry changes, reported Bangkok Post.
Krungsri, Thailand’s fifth-largest bank by total assets, is 76.8% owned by Japan-based Mitsubishi UFJ Financial Group. As of March, its corporate loan portfolio totalled 688.9 billion baht, with 193.2 billion baht from Japanese corporates and 495.6 billion baht from Thai and multinational firms.
“Given the elevated uncertainties in both global and local economies, we are focusing our growth strategy on select sectors while closely monitoring those facing greater challenges,” Prakob added.
The Krungsri chief stated that the real estate sector is facing several challenges, including a slowdown in residential projects, an oversupply in office space, and a sluggish hotel market linked to weaker tourism trends. Additionally, real estate operators are under pressure from bond rollover issues.
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