Thai commercial bank bad loans seen steady later this year - central bank

 

FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva

 

BANGKOK (Reuters) - Bad loans at commercial banks in Thailand rose slightly in the second quarter and should steady later the year due to measures to help debtors hit by the coronavirus pandemic, the central bank said on Monday.

 

Non-performing loans (NPLs) rose to 3.09% of total lending at the end of June from 3.04% as of March, Tharith Panpiemras, a senior Bank of Thailand (BOT) director, told a news briefing.

 

The BOT has discussed with banks about helping debtors when current relief measures end in October, such as debt moratoria and restructuring, he said.

 

"There will still be measures to help debtors and businesses but they will be more targeted, not broad-based," Tharith added.

 

Despite economic problems, banks' lending rose 5% in the first half of 2020 as large companies sought loans amid tight liquidity and a volatile bond market, he said, adding that loans should grow about 5% this year.

 

Financial institutions remain strong with high capital positions, he said, while a preliminary stress test showed they could handle the situation this year.

 

"But the concern is more likely in the next year," he said.

 

In June, the BOT asked banks to prepare capital management plans for the next 1-3 years and suspend 2020 interim dividends and share buybacks to assess their capital levels post-COVID-19.

 

The 2021-2022 stress test results will be known in October.

 

Southeast Asia's second-largest economy shrank 12.2% in April-June from a year earlier, the sharpest since 1998, as the pandemic battered tourism and domestic activity.

 

The shrinkage was still less than the BOT had expected and the economy should have bottomed, although high uncertainty remains, senior BOT director Don Nakornthab said in a statement.

 

The BOT has forecast a record economic contraction of 8.1% this year and will review that at its rate meeting next month.

 

(Reporting by Kitiphong Thaichareon and Orathai Sriring; Editing by Martin Petty)

 

-- © Copyright Reuters 2020-08-18

 

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Thailand could develope its version of Helecopter Ben in the next few months.  Unfortunately   just as happened in the U S  this woud unlikely help the common folk.

Many loan repayments are suspended at the moment. Could give a surprise if they have to be paid back again... 

6 hours ago, webfact said:

Thai commercial bank bad loans seen steady later this year

crystal ball economics?

SM loans are NPL in the making.

 

Edited August 18, 20205 yr by ExpatOilWorker

Last week they said NPLs were expected at 40 percent-now it’s 3?

40 seems very high, but probably not for Thailand.

3 percent is an outright lie.

Edited August 18, 20205 yr by Redline

So, NPL's will be 3% ish, whilst economy plummets 15-20%, 80% tourism dive, 20% exports reduction, 10% business closures, mass unemployment, etc ? Guy's nuts ! (Apologies to anyone named Guy)

 

 

 

The calm before the typhoon. ????

5 hours ago, Redline said:

Last week they said NPLs were expected at 40 percent-now it’s 3?

40 seems very high, but probably not for Thailand.

3 percent is an outright lie.

I would still believe the 40% of GDP NPL stat.

Many Loans are in suspension at the moment, and unless the Gov,t injects massive  amounts of money into keeping these Loans from going bad then  40% of GDP is a realistic projection.

It is a well publicised fact that Thailands population are the second highest leveraged borrowers in SE Asia, and with the Covid outbreak smashing the Economy as it is doing, there is certainly going to be a massive amount of NPL and delinquent Loans 

14 hours ago, Bender Rodriguez said:

crystal ball economics?

 

Well they had a 50/50 chance of getting it right but blew it.

 

I'm thinking that bad loans will increase! Who's with me ?

 

21 hours ago, Chelseafan said:

I'm thinking that bad loans will increase! Who's with me ?

Through the roof. 

 

Think, subprime, USA, 2008.