(Bloomberg) — Comply with Bloomberg on LINE messenger for all of the enterprise information and evaluation you want.Thais are turning to banks as a protected haven, including deposits at a report tempo within the Covid-19 period. Whereas that’s a vote of confidence, the lenders are more likely to face a tough time placing all of the funds to good use.Complete deposits in any respect business banks surged by 833 billion baht ($26 billion) in March, a report for a single month, in keeping with Bank of Thailand information relationship again to 2001. That would sign strain on internet curiosity margins amid difficult lending situations, in keeping with Yuanta Securities (Thailand) Co.There’s much less alternative to search out sufficient debtors as Thailand faces its deepest financial contraction because the late 1990s. The pandemic has badly broken the nation’s conventional drivers, tourism and exports. A lockdown is being eased progressively however nonetheless prevents regular enterprise operations.“While deposit growth has largely been in the low-cost current and savings segment, a lack of opportunities to lend and lenders’ risk aversion could pressure banks’ loan-to-deposit ratios, and consequently hurt margins,” mentioned Diksha Gera, an analyst at Bloomberg Intelligence.Corporations have hoarded cash to keep away from a “liquidity crunch,” SCB Securities Ltd. mentioned in a notice. The working margin of listed Thai banks narrowed to 30% within the January to March interval, the bottom degree since 2017, in keeping with information compiled by Bloomberg.As of March 31, Thai bank loans had been 92% of whole deposits, the bottom proportion since 2009. The stock market gauge of business banks is down 1.4% on Friday in Bangkok and has dropped 34% thus far this 12 months, outpacing a 16% decline within the benchmark SET Index.The measure of banking shares dropped 1.9% as of 11:17 a.m. in Bangkok, led by Bank of Ayudhya Pcl and Siam Business Bank Pcl. The benchmark SET Index fell 0.5%.That’s to not say Thai banks aren’t seeing new enterprise. Home banks’ excellent loans rose by 224 billion baht in March, the most important enhance since 2017. Some corporations have turned to banks as a result of it’s develop into tougher to borrow within the company bond market.Even so, new lending accounted for a few fourth of latest deposits in March as firms delayed funding and enlargement, SCB Securities mentioned. The climb in deposits that month was 39% larger than the mixed enhance for all of 2019, Bank of Thailand information present.If historical past is any information, main Thai banks gained’t lend in haste. Bangkok Bank Pcl, Kasikornbank Pcl and Siam Business Bank Pcl had been among the many few native survivors of the late 1990s Asian monetary disaster. That have made them extra conservative than many friends in Southeast Asia.(Updates with drop in bank shares in sixth paragraph)For extra articles like this, please go to us at bloomberg.comSubscribe now to remain forward with probably the most trusted enterprise information supply.©2020 Bloomberg L.P.