Bad debts by household borrowers exceed THB1 trillion in Q3

NCB chief executive Surapol Opasatien said on Friday that non-performing loans (NPLs) from household borrowers came in at 1.09 trillion baht in the third quarter, accounting for 8.4% of total debts. That was a tiny drop from 1.1 trillion in the second quarter, which made up 8.6% of all debts.

He said at the end of the third quarter, 25 million borrowers came under the NCB system. Of their total debts, 529 billion baht came from credit cards, 2.5 trillion from personal loans, another 2.5 trillion from vehicle loans, 4.7 trillion from home mortgages and 1 trillion from farming loans.

According to the Bank of Thailand, NPLs in the banking sector only accounted for 2.77% of bad loans at the end of the third quarter, down from 2.88% in the second quarter.

Records show that 3.88 million bank loan holders came under the central bank’s debt restructuring programme as of August 31, while 135,805 people sought 339 billion baht in new soft loans for business rehabilitation.

Surapol put the huge amount of bad debts on the Covid-19 crisis. He said NPLs caused by the fallout of the pandemic totalled 400 billion baht at the end of the third quarter, double the 200 billion seen in January.

That accounted for as much as 40% of the 1.1 trillion baht in bad loans during that period.

Of all household debts, the NCB chief said personal and vehicle loans were “the most worrisome”, as most of the borrowers were Generation Y (aged 25-42). This generation is believed to be responsible for the highest number of bad debts among all age groups – 340 billion baht in the first nine months of this year.

Gen Y borrowers secured 53% of all auto loans in the first nine months of this year, and 61% of all personal loans in the same period, NCB data showed.

As for home loans, 4% or 180 billion baht have turned into bad debts, while unpaid credit card bills have risen as high as 12.2%.