Sep. 23--The Export-Import Bank of Thailand is expected to miss its loan growth target this year, despite positive growth trends in the second half, according to president Apichai Boontherawara.

The state-owned bank had set a loan growth target of 5 percent for the full year, but saw its loan book shrink in the first half of the year due to the domestic and global economic recession.

But loan demand has picked up as companies increase production and raise inventory levels. The government's fast-track programme to streamline credit approval procedures at state banks has also helped facilitate loan growth.

Dr Apichai said that while loan demand had improved, withdrawals remained tepid. Loan approvals for the year to August totalled 31 billion baht, mostly for working capital and restocking.

"Despite better signs, both in terms of export orders and loan demand, customers still want to wait and see a clearer picture [for the economy]," he said.

"Loan drawdowns are expected to total 20 billion baht this year, compared with loan approvals of 31 billion baht."

The Exim Bank yesterday signed a co-operative agreement with TMB Bank to offer export insurance service in case of payment defaults by trade partners.

Dr Apichai said the bank's indemnity for the export insurance service had risen dramatically to 108 million baht for the first eight months of the year compared with 16 million last year, reflecting the impact of the global recession.

Risk of payment defaults would remain, even though global trade has improved. The service of Exim Bank would help exporters reduce the risk and keep a lid on creditors' distressed debts.

Non-performing loans at the Exim Bank stand at 4-5 billion baht compared with total outstanding loans of 45 billion.

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