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Bad loans to rise even further this year, says Bank of Thailand


The Bank of Thailand (BOT) expects non-performing loans (NPLs) to rise this year amid the lingering Covid-19 impact on businesses.

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BOT senior director Suwannee Jatsadasak said commercial banks’ accumulated NPLs last year stood at Bt523.3 billion, or 3.12 per cent of total loans – up from 2.98 per cent in the previous year.

"Most of the NPLs came from small and medium-sized enterprises [SMEs], rising to 3.23 per cent compared to 3.01 per cent in the year before," she said. "However, NPLs from consumers dropped to 2.84 per cent compared to 2.90 per cent in the previous year, thanks to commercial banks' measures to help debtors."

She expected NPLs this year to increase compared to last year.

"However, NPLs will not rise sharply because they are still under commercial banks' control," she said.

Tourism-related businesses have accumulated debt of about Bt400 billion due to the Covid-19 impact, and most still need assistance from commercial banks, she added.

"The BOT is cooperating with the Finance Ministry in seeking a solution via soft loans and asset warehousing as soon as possible," Suwannee said.

Commercial banks still have strong fundamentals to soften the economic impact of the pandemic, she assured.

"Commercial banks' capital adequacy, NPL coverage and liquidity coverage ratios are 20.1 per cent, 149.2 per cent and 179.6 per cent, respectively," she said.

Published : February 23, 2021

By : The Nation