Bangkok Bank (China) or BBC, the Chinese unit of Thailand’s largest bank in terms of assets, has continued to increase its loan portfolio in yuan, in line with customers’ higher yuan loan demand because of the stronger US dollar.

The bank’s customers pay debts in dollars after China’s central bank devalued the yuan in September. The yuan’s depreciation against the dollar has lead to higher financial costs for borrowers. Therefore, the bank’s customers have shifted from the dollar to the yuan as risk management, raising the bank’s loan portfolio in the Chinese currency, BBC chief executive Suwatchai Songwanich said.

Its loan demand in yuan has continued to increase, pushing the loan portfolio in yuan to 76% from 35% in 2009, while the dollar portfolio has dropped to 24%. In addition, the Chinese government has called for the yuan to be a key global currency.

Mr Suwatchai said after customers pay debts in dollars, they prefer to watch China’s economic performance rather than take out new loans. As a result, the bank’s total outstanding loans have dropped marginally. However, there are some deals in the pipeline that will help to raise the total loan portfolio by the year-end. Under this scenario, the bank expects to book flat loan growth throughout this year with a total outstanding debt of US$1 billion.

BBC, a wholly owned subsidiary of Thailand’s largest lender, plans 2016 loan growth in line with China’s GDP growth rate, which is expected to be 6.7%.

Given the strong risk management amid China’s economic cooling, the bank aims to maintain non-performing loans (NPLs) at the existing low level of 0.3% of the total loan portfolio next year amid the current rising trend of bad debts in China’s banking industry.

On average, the sector’s NPLs rose to 1.59% in the third quarter of this year from 1.5% in the second.

Mr Suwatchai said the number of Thai customers investing in China has also declined in tandem with the country’s economic situation.

BBC’s Thai customer ratio has dropped to 30% from 33%, while the local customer base has risen to 40% from 33%.

Meanwhile, BBC’s outbound investment in Asean countries, especially Indonesia, Cambodia, Laos, Myanmar and Vietnam shows a positive trend.