Bank of Ayudhya (Krungsri) sees greater opportunity for large corporate customers to make merger and acquisition (M&A) deals this year thanks to a clearer economic outlook following the easing of the pandemic.
The bank has more than 10 M&A deals in the pipeline, both domestically and and in the international markets, mainly renewable energy projects as well as food and beverage.
Most are mid-sized deals valued at 1-5 billion baht per deal, said the head of Krungsri's corporate and investment banking group, Prakob Phiencharoen.
The M&A opportunities this year exceed those available the past few years during the pandemic, as several firms were crippled by the effect of lockdowns and cannot survive, igniting higher demand for M&A deals, said Mr Prakob.
"This year more business owners are confident making decisions about M&As as the Thai economy picks up," he said.
"Demand for M&A financing is expected to increase significantly."
According to Mr Prakob, loan demand for new investment projects, transition financing projects, and green financing projects is expected to continue increasing, supported by an economic recovery and environmental, social and corporate governance (ESG) trends.
However, the bank wants to continue to be prudent with its financing, especially in the property sector given the uneven economic rebound, he said.
Krungsri, the country's fifth-largest lender by total assets, set a wholesale loan growth target of 5% this year from total corporate loans outstanding of 475 billion baht and 2% growth in 2022.
The bank expects to increase ESG-related loans to 50-100 billion baht by the end of this year, a significant jump from the 35 billion recorded in 2022.
Mr Prakob said the bank will continue to develop financial products to support sustainable business and cultivate global ESG financing covering sustainable loans, sustainable bonds, ESG bonds and loans for environmental purposes.
Krungsri established a "Centre of Excellence" unit to support customers' ESG requirements, he said.
Mr Prakob said large corporate clients are reporting good asset quality and remain on a positive trend based on solid financial conditions in the customer segment.
However, some corporate customers that suffered from the impact of pandemic restrictions entered the bank's debt assistance scheme over the past few years.
The economic recovery has been supporting customers' ability to make debt payments and the bank expects most of them to continue to exit from this programme, he said.
