Thai banks seen posting 3%-5% loan growth this year - central bank

Thai banks seen posting 3%-5% loan growth this year - central bank

FILE PHOTO: The Bank of Thailand logo is seen in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva

BANGKOK (Reuters) - Commercial banks in Thailand are expected to post loan growth of 3-5% this year with lending in the current quarter expanding faster than the previous quarter's pace as the economy recovers, a senior director at the Bank of Thailand (BOT) said on Monday.

Loans grew 4.6% in the third quarter from a year earlier and 3.9% in the January-September period, Suwannee Jatsadasak told reporters. In 2019, loans expanded 2%.

Non-performing loans (NPLs) are expected to keep rising but not by much as banks are still helping debtors, particularly smaller businesses, Suwannee said.

Despite a debt payment holiday, coronavirus pandemic-exacerbated NPLs stood at 3.14% of total lending at the end of September, the highest in more than nine years, up from 3.09% at the end of June.

The government-mandated six-month debt holiday ended on Oct. 22, potentially accelerating the growth of bad debt.

The central bank could adjust this year the rules of its 500 billion baht ($16.6 billion) soft loan programme, Suwannee said, after such lending to smaller businesses had been slow.

In the third quarter, the economy declined a less than expected 6.4% from a year earlier, while posting better than expected 6.5% growth on the quarter as domestic activity improved after coronavirus restrictions were eased.

($1 = 30.17 baht)

(Reporting by Kitphong Thaichareon; Writing by Orathai Sriring; Editing by Ed Davies)