High reserve for doubtful debts leaves Exim Bank with Bt1.4-billion loss

“If the reserve were to be excluded, the bank would have recorded a profit of Bt1.1 billion in the first half of 2020,” Phisit Sareewiwatthana, Exim Bank president, said.
It is possible that the bank would increase the reserve in the second half of the year, depending on the export situation, he said.
“We estimate that by the fourth quarter, the situation would improve with around 70-80 per cent of customers being able to continue their businesses,” he said. “We also estimate annual operation revenue to contract, which is expected in the current economic situation.”
Exim Bank's non-performing loans (NPLs) in the first half of 2020 rose to 6.37 per cent from 4.6 per cent at the end of 2019, up by roughly 30 per cent. Outstanding loans were Bt126 billion, up 18 per cent from the same period last year which had recorded at Bt107 billion.
“It is notable that the export insurance rate has jumped 70 per cent, from Bt37 billion in the same period last year to Bt97 billion,” added Phisit. “The reason is, exporters are uncertain about importers’ paying ability so they are opting to get an insurance.
He said the bank has provided three packages to its customers, especially those rejected by commercial banks:
1. Export insurance package for small and medium-sized enterprises that have annual income less than Bt100 million or fewer than 50 employees, starting at only Bt100,000 with maximum coverage of Bt2 million.
2. Loan package for medium-sized entrepreneurs at maximum Bt80 million per customer and interest rate of 3.75 per cent annually.
3. The Thai Keng Exim package, which aims to support rotating fund at Bt3 million per customer for entrepreneurs in competitive industries such as industrial agriculture, biotechnology, food processing and cosmetics. The loan will have a fixed interest rate of 4.75 per cent annually, and will be reduced to 4 per cent in case the entrepreneurs export to Cambodia, Laos, Myanmar or Vietnam.