Despite relatively low prospects for the country's economic growth, the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) remains upbeat on its farm lending scheme, aiming for 4% growth to 69 billion baht this financial year, which starts on April 1.
Newly-appointed BAAC President Tanaratt Ngamvalairatt said BAAC remains committed to set the new lending goal higher than this past previous financial year to demonstrate the bank's readiness in loan provision for the farm sector.
However, he noted if the situation becomes unfavourable the bank is prepared to revise the lending goal.
"This is a challenging year for loan extensions, as the country's overall economic growth remains relatively low at 2.5-3.5% this year," he said.
In the 2020 financial year (ending on March 31) BAAC has extended only 62 billion baht worth of new loans, up 4% from the previous year. The total was 11 billion baht below the target.
At the end of the 2020 financial year, the bank had total assets worth 2.039 trillion baht, up 4.9% from 2019, with outstanding loans worth 1.572 trillion baht, up 4.90%; liabilities worth 1.892 trillion baht, up 3.94%; and deposits outstanding worth 1.730 trillion baht, up 3.41%. The bank posted a net profit of 7.18 billion baht, down 27.47% from 9.9 billion baht in the previous year.
Mr Tanaratt said the bank this year needs to focus more on managing its liquidity to make it align with the lending rate in the last financial year, when the company's loan extension was below the target, but deposits flooded to 120 billion baht, outstripping the target set at 57 billion baht.
For this financial year the bank has set a deposit target at only 25-30 billion baht, he said.
According to Mr Tanaratt, BAAC has more than 200 billion baht in surplus liquidity, leading the bank to scale down on deposits.
This year, although the bank's existing savings lottery worth 120 billion baht is scheduled to be redeemed, the bank plans to issue new ones worth only 60-80 billion baht while whittling down the savings lottery's maturity period to only 1-2 years from 3-5 years.
Mr Tanaratt said as the new chief of the BAAC he aims to build up a social safety net for farmers and farming communities with potential networking partners to upgrade farm products and services; invest more in R&D, marketing and social and environmental care.
The bank also pledges to support and promote farmers and younger demographics to strengthen economic growth in rural areas while helping with farmers' existing debt burdens through debt restructuring schemes and vocational rehabilitation programmes along with support technology to facilitate both product delivery and financial services.