NESDC warns of rising NPLs among buyers of homes worth 3m or less
Council urges banks to renegotiate payment terms to ensure rising non-performing loans do not shake up the economy
The National Economic and Social Development Council (NESDC) said it was worried about homebuyers not being able to repay their loans and called on banks to renegotiate payment terms.
The council said most of the loan defaulters are those who have bought homes in the 3-million-baht price bracket, and warned that banks should take steps to prevent rising non-performing loans (NPLs) from destabilising the economy.
Danucha Pichayanan, NESDC secretary-general, made the comment while announcing a study on the social impact the state of the economy has had in the first quarter of this year.
He said household debt stood at 16.4 trillion baht, which was 91.3% of the GDP, adding that though household debts were rising at a slower pace, the quality of debts in all categories became poorer with rising NPLs.
He said the focus should be on loans given to homebuyers as the rate of NPLs within this group had risen startlingly from -1.7% to 7% in the first quarter. Also, he said, 73.4% of these NPLs were for homes lower than 3 million baht.
He also pointed out that borrowers’ ability to pay household debt had dropped in all categories.
The first quarter saw NPLs of commercial banks at 158 billion baht or 2.88% of the overall debt, he said, adding that the rate of NPLs had risen by 2.79% compared to the previous quarter.
Hence, he said, banks should talk to loan defaulters and restructure their payments to prevent their loans from becoming NPLs.
The NESDC warned that if NPLs among homebuyers worsened, these debtors would be forced out of their homes and that could have a domino effect on other sectors.
