Kasikornbank to allot 250% more loans to China SMEs

The lender is cautiously positive in expanding in China as its central bank tightened banking reserve requirement to avert possible overheating of economy.

Kasikornbank plans to further expand in China despite stronger regulations by the mainland's central bank to prevent the economy from overheating.

Chief executive Banthoon Lamsam said the bank aimed to expand SME loans in China to 1 billion yuan ($154.13 million) by the end of the year from 400 million yuan ($61.65 million) now.

The bank maintains a positive outlook for its business in the mainland in line with the country's robust economic growth. However, it remains vigilant, especially, after China's central bank tightened banking reserve requirement.

China's central bank recently raised for the fifth time this year the reserve requirement ratio (RRR) of the country's lenders to curb lending. The half-percentage-point increase brought the ratio to a record high 21% compared to 6% during 2006-07.

The measure is expected to ease inflationary pressure and cool the fast-growing economy.

''Even though the stricter rule might slow loan expansion, it would help control our asset quality. While there remain great business opportunities in China, the important thing is good risk management,'' Mr Banthoon said.

View the full story in Bangkok Post.