Host of borrowers struggling from Covid-19 fallout apply for second debt-relief scheme

[webfact]

Host of borrowers struggling from Covid-19 fallout apply for second debt-relief scheme

By The Nation

 

Ronadol Numnonda, BOT deputy governor

 

The Bank of Thailand (BOT) said some 85 per cent of retail debtors struggling in the fallout of Covid-19 have applied for the second-phase of debt relief, while Kasikornbank projects 60 to 70 per cent of debtors will be able to start repaying their debts once the subsidy wraps up.

 

Ronadol Numnonda, BOT deputy governor, said many businesses have been hit hard by the Covid-19 outbreak, especially tourism-related services such as hotels, airlines and car-rent companies, which are unlikely to rebuild any time soon as the arrival of 40 million tourists is a thing of the past. 

 

He said that there is an oversupply in tourism-related industries, adding that the government and private sector need to find solutions to support and remodel these businesses and restructure their debts. 

 

Financial institutions, namely commercial banks as well as specialised and non-banking financial institutions, have implemented several rescue packages for their debtors. 

 

As of the end of July, up to Bt7.2 trillion has been spent on providing financial relief to 12.52 million borrowers. Of this, Bt4.25 trillion was provided by commercial banks and non-banking entities to ease the burden for 6.12 million borrowers. 

 

Financial relief includes debt moratorium, debt restructuring, interest rate cuts, refinancing and new soft loans.

 

State-run banks, meanwhile, provided support to 6.41 million borrowers holding debts worth a total of Bt2.94 trillion.

 

As of July 15, more corporate clients applied for financial relief, up about 0.15 per cent from the previous period, while 0.7 per cent fewer small businesses sought help.

 

Support worth Bt1.63 trillion was provided to 5.74 million retail debtors, marking a slight drop from applicants in the first phase. 

 

Now that banks and non-banking institutions are also offering financial support in the second phase, 85 per cent of old debtors and 15 per cent of new ones have applied for help. 

 

Most of the retail debtors who received support in the first phase and were able to start servicing their debt again were engaged in hire-purchase schemes, he said. 

 

Surat Leelataviwat, vice executive president at Kasikornbank, said the bank has helped 98,000 corporate clients whose loans are worth Bt600 billion.

 

The second phase of financial support will run until the end of October, and Kasikornbank estimates that 60 to 70 per cent of these borrowers will resume their debt repayment. 

 

However, borrowers in the hotel and tour businesses will continue to need help as the industry has yet to return to normal. 

 

Kasikornbank has provided debt relief to 600,000 retail borrowers whose debt totals Bt190 billion. It expects some 70 per cent of them to be able to resume payments. 

 

Pikul Srimahan, senior vice president at Siam Commercial Bank, said the bank has provided support worth Bt800 billion, or 39 per cent of its total loans. This support includes debt moratorium, debt rescheduling and soft loans with 2 per cent per annum interest rate.

 

Kitiya Srisanit, chief of Krungsri Bank’s Krungsri Auto Group, said many businesses are gradually recovering from the Covid-19 fallout, adding that the bank has restructured or suspended the debts of 650,000 borrowers.

 

Meanwhile, 4.2 million consumer loan account holders participated in the first-phase of the debt-relief scheme and as of July 1, 10,000 applied for additional support. 

 

Separately, Krung Thai Bank has provided support to 200,000 clients so far, and believes another 2,500 corporate clients with a combined debt worth Bt150 billion may seek financial relief in the second phase.

 

Source: https://www.nationthailand.com/business/30394150

 

-- © Copyright The Nation Thailand 2020-09-08

 

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[PatOngo]

9 minutes ago, webfact said:

As of the end of July, up to Bt7.2 trillion has been spent on providing financial relief to 12.52 million borrowers. Of this, Bt4.25 trillion was provided by commercial banks and non-banking entities to ease the burden for 6.12 million borrowers. 

They're in pretty deep, are'nt they!

[86Tiger]

".........85 per cent of retail debtors struggling......."

 

".........Bt7.2 trillion has been spent on providing financial relief to 12.52 million borrowers........."

 

".........Bt1.63 trillion was provided to 5.74 million retail debtors........"

 

 

Yep.  They are in pretty deep.  The real problem is no end in sight......

[nev]

This is not sustainable, I can see many many Businesses going to the wall and being left with huge debts they are unable to pay back.

[Bender Rodriguez]

next pandemic (soon?) .... don't kill the economy and take the deaths that go with it instead of fake "58" deaths since 6 months

[Cake Monster]

3 hours ago, nev said:

This is not sustainable, I can see many many Businesses going to the wall and being left with huge debts they are unable to pay back.

You are correct. This amount of Debt that keeps having to be " restructured" Etc with soft Loans and Debt Moratoriums, will sooner or later go bad. This will then enter the Banks Books as NPL something the banks do not want as it affects their Share price among other things.

The Report stated the problem in a Nutshell.

There are way too many Business,s in the Tourism Sector, causing an over supply.

Naturally, the Business,s that are failing and in Debt should be allowed to sink out of sight, as with all over supply a high percentage of it will be no good. That is the way of Business.

What will be left after the Sword has fallen will be better and stronger Business,s able to go forward with confidence, not just for themselves, but for their Investors also. 

 

[Almer]

Reduce or remove the requirements for retirement/ marriage visa to tie up money for a year thus putting a bit more  into circulation you may  just see a small impact in places like Pattaya if it was not all locked away in the banks whilst the small traders starve, i know in the scheme of things it is small but it must help.

[86Tiger]

35 minutes ago, Almer said:

Reduce or remove the requirements for retirement/ marriage visa to tie up money for a year thus putting a bit more  into circulation you may  just see a small impact in places like Pattaya if it was not all locked away in the banks whilst the small traders starve, i know in the scheme of things it is small but it must help.

 

 

A spit in the river compered to the problem they are facing...

[seajae]

have seen some of our friends/acquaintances get into problems and some have had to put houses/land on the market, they are really doing it hard and these are ones that were in good financial positions before covid when they had well paying jobs, must be even harder for some, hopefully they can get back into work and start getting financial relief before too long

[scammed]

the cause of this economic disaster is not covid19,

its the knee jerk reaction by politicians that caused it.

i.e politicians caused it single handedly

[Blumpie]

Dropping 40 some odd million people dropping gobs of cash into the economy will certainly have a dire economic impact.  

 

This impact cannot be overstated.  People are going to be realizing this fully when the high season ends and there is no-one.  Not one person here spending their money.  

[Oldie]

1 hour ago, Almer said:

Reduce or remove the requirements for retirement/ marriage visa to tie up money for a year thus putting a bit more  into circulation you may  just see a small impact in places like Pattaya if it was not all locked away in the banks whilst the small traders starve, i know in the scheme of things it is small but it must help.

This money is not tied up. This went into credits and will perhaps soon show up under Non-Performing Loans. You might be lucky if you ever see it again ???? BUT don't worry. In the worst case there is also a deposit insurance - if Thailand is not completely bankrupt. 

[hotchilli]

21 hours ago, webfact said:

He said that there is an oversupply in tourism-related industries, adding that the government and private sector need to find solutions to support and remodel these businesses and restructure their debts

Understatement of the decade.