Thailand's big banks are feeling the impact of the country's economic slowdown and are tightening loan procedures amid a rise in bad debts, falling exports and lower-than-expected consumption. Top lender Bangkok Bank,, which reported a better-than-expected 18 percent rise in quarterly net profit, saw non-performing loans (NPL) up slightly to 2.4 percent of total loans from 2.3 percent at the end of 2012. The rise in bad debt is in line with the industry. Leading car loan lender Tisco Bank said its NPLs rose to 1.45 percent at the end of the second quarter from 1.2 percent at the end of 2012, mainly due to bad debt in the used car market. Siam Commercial Bank (SCB), Thailand's third-largest lender by assets, said this week it had decided against revising up its 2013 loan growth of 13 percent on signs the Thai economy was slowing. "We had earlier planned to raise our target because we had a very strong loan growth in the first half. But growth should be slower in the second half," SCB President Kannikar Chalitaporn told reporters, adding rising risks mainly stemmed from the global economy. SCB, which posted loan growth of 12 percent in the first half, would be more careful about giving loans to companies in the commodities sector and those which export to China, Kannikar added. China's growth rate slowed to 7.5 percent in the second quarter, the ninth quarter in the last 10 that expansion has weakened, in a setback for companies betting on a continued boom in the world's second-biggest economy. SCB, fourth-ranked Kasikornbank and fifth-ranked Bank of Ayudhya are due to release quarterly earnings. They are expected to post 15-25 percent increase in net profit. Thailand's slowing economy has raised concerns that the country's banks may miss their loan growth targets this year, while some analysts have already cut their earnings forecasts for the local banks to reflect slower growth in the next few years. "We are less positive to the sector's outlook, given the poorer economic outlook, worsening investment sentiment and slower-than expected consumption," Thaninee Satirareungchai, analyst at KGI Securities said in a note. In the past three months, the Thai banking index has dropped 7.3 percent, versus a 4 percent drop of the broad index The Thai economy could slow in the second half and may grow only 4.5 percent this year, but scope for lower interest rates is limited by financial conditions, an independent member of the central bank's monetary policy committee (MPC) said. The Bank of Thailand left its benchmark interest rate unchanged at the latest meeting on July 10, which could help ease pressure on net interest margins of Thai banks. Central banks across emerging markets have been fighting to stem an outflow of foreign capital driven by the impending turn in U.S. policy to reduce the pace of its monetary stimulus. (Reuters)