NPLs soar as households struggle to pay their debts
Economists believe that a 25 basis point reduction in interest rates by commercial banks will ease the burden on individuals and businesses
Thai household’s non-performing loans (NPLs) reached a new high in the third quarter, the National Credit Bureau (NCB) chief executive Surapol Opasatien reported this week.
He said Thai household NPLs surged to 1.2 trillion baht in September compared to 1.18 trillion baht in August. He also pointed out that special mention loans (SM), which were at risk of becoming NPLs, stood at 640 billion baht in August.
Meanwhile, 1 million accounts worth 540 billion baht were registered with the credit bureau for preemptive debt restructuring from April to August this year, he said, adding that debt restructuring could prevent SMs from turning into NPLs.
According to Krungthep Turakij’s report on Tuesday, NPLs of 10 commercial banks in the third quarter stood at 537.90 billion baht, up 5.36% compared to 510.52 billion baht at the end of 2023.
Most banks faced an increase in NPLs, especially Bangkok Bank with 103.99 billion baht, up 20.99% compared to 85.95 billion baht at the end of last year.
NPLs of Kasikornbank and Bank of Ayudhya were 92.93 billion baht and 74.41 billion baht, up 0.53% and 21.4% respectively.
To cope with rising NPLs, commercial banks have reduced loan interest by 25 basis points in line with the recent reduction in Thai policy interest rate from 2.50% to 2.25%. Some banks have also extended their measures to assist vulnerable debtors until the end of this year.
Kasikorn Research Centre’s research executive Kanchana Chokpaisansilp expects loan interest reduction to relieve the burden on people and business operators by 1.3 million baht.
