BANGKOK, June 15 Bangkok Bank (BBL.BK), Thailand's biggest lender, is optimistic that government spending will bolster the economy and revive its loan growth this year, and it expects earnings to beat analysts' forecasts.
Executive Chairman Kosit Panpiemras told Reuters on Monday the bank could hit its 2-4 percent loan growth target this year, and that would help push 2009 earnings near to last year's 20.2 billion baht ($591 million).
"Government investment is now the only key catalyst for the economy as the private sector is very weak. So if the economy can be driven by investment, there's a chance our lending can turn positive," Kosit said in an interview.
Eighteen analysts polled by Reuters Estimate expected a 12 percent fall in the bank's net profit to 17.7 billion baht this year.
Thailand's parliament began a debate on Monday on an executive decree and a government bill to raise a total 800 billion baht in loans to help stimulate the economy, which should boost construction firms in particular.
Bangkok Bank, a barometer for domestic industry, reported a 5.5 percent contraction in its lending in the first four months, after the global financial crisis and prolonged political strife hit exports, tourism, investment and consumption.
"But we have hopes, with the big investment expected in the second half. So we will try our best to make our net profit stay close to what we made last year ... It's possible," Kosit said.
The bank reported a 13.5 percent drop in first-quarter profit as economic weakness hit loan demand and lower interest rates hurt income.
Bangkok Bank, which has 1.73 trillion baht in assets and 1.05 trillion baht in loans, considers its bad debt manageable and will try to maintain its non-performing loans (NPLs) at around 5 percent of lending this year, Kosit said.
Asked about overseas expansion, he said the bank would continue expanding into China, but risks associated with the global financial crisis meant it would be cautious about building up its interests there.
At the midday break, shares in Bangkok Bank, valued at $6.17 billion, were up 0.91 percent at 111 baht, while the main Thai index .SETI was down 1.11 percent.
(Reporting by Arada Therdthammakun; Editing by Alan Raybould)
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