BCEL loans boost Lao industry
BCEL loans boost Lao industry
BCEL bank, the largest commercial bank in Laos, has granted a large number of loans to businesses over the first quarter of this year, giving a major boost to national economic development.
According to a report from BCEL-KT last week, one of the two stockbrokers in Laos, the loan portfolio of BCEL reached 5,800 billion kip (US$725 million) at the end of the first quarter of 2012.
That figure represented a 13 percent increase compared to the last quarter of the previous year, thanks to increasing loan demand and strong economic growth.
Most of the bank's loans were granted to firms in the industrial, construction, transport and service sectors, which are experiencing considerable growth.
The public bank saw 90 percent loan growth in 2011. One of the mega investment projects it financed was to provide a US$71 million loan to Lao Airlines to purchase two A320 from Airbus in France, enabling the state-owned airline to offer improved services amid growing competition.
Despite rapid loan growth, the bank still has the capacity to offer more loans due to the large volume of deposits it holds. At the end of 2011, deposit value at the bank was above 10,000 billion kip while loan value was just below 6,000 billion kip.
More than half of the deposits and loans were in foreign currencies (mainly US dollars and Thai baht), reflecting the fact that most Lao people still feel confident about depositing in foreign currencies despite the strong value of the kip.
BCEL-KT, which is also a subsidiary of BCEL, says it expects loan growth to approach 40 percent in 2012, adding that the country's growing economy will boost loan growth and benefit the bank.
“BCEL should benefit from the country's strong economic growth momentum, with the ADB and IMF forecasting that GDP growth will hover at 7 to 8 percent per year from 2012-15,” the stockbroker says in its report.
BCEL was established in 1975 and became a full commercial bank in 1986. The value of the bank's total assets as of December 2011 was 12,814 billion kip (US$1.6 billion), representing a 35 percent market share of the total financial industry in Laos.
In terms of income breakdown, around 38 percent comes from net interest income on loans, 31 percent from service fees and ATM fees, 14 percent from exchange rate services, and 17 percent from trading income on precious metals and investments.
vientiane times
