Credit Bureau sounds alarm over 610 billion baht in housing loans in default

[snoop1130]

 

The National Credit Bureau has raised the alarm over the prospect of about 610 billion baht in housing loans becoming bad debts, as it urges the government to come to the rescue of the debtors expeditiously.

 

Surapol Opasatien, CEO of the National Credit Bureau, said that there are worrisome signs that about 610 billion baht in mortgages may become non-performing loans (NPLs),because many mortgage borrowers, who are mostly low and middle-income earners who bought houses for 3 million baht or less, are late by 1-2 repayments.

 

Unless these debtors receive urgent help from the government, in the form of debt refinancing, he warned that these loans may become NPLs which, in the long run, will impact heavily on the Thai economy.

 

Full story: Thai PBS 2024-02-26

 

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[Crossy]

Couple that with the return to pre-covid credit card minimum payments which rose to 7.5% of outstanding balance this year and will return to the full 10% of outstanding balance next (or maybe the year after) and we have a potential issue!

 

The unofficial loan people will step into the breach and then ...

 

[StayinThailand2much]

Funny, I remember reading a few posts of news announcements by Thai banks in recent months on this very forum that there is 'no reason to worry, as NPLs are less than 2% of all loans'... - What has changed over the past two or three months that housing loan defaults are suddenly a big worry?

Edited February 26 by StayinThailand2much

[BE88]

7 minutes ago, StayinThailand2much said:

Funny, I remember reading a few posts of news announcements by Thai banks in recent months on this very forum that there is 'no reason to worry, as NPLs are less than 2% of all loans'... - What has changed over the past two or three months that housing loan defaults are suddenly a big worry?

 

 You know that when the banks say you don't need to worry, that's when we need to start worrying.

[ukrules]

What does this mean then?

 

A big crash in the housing market and the end of a few banks or a massive government bailout.

[ikke1959]

There is no need to help, the people with high debts. A assistance of how to use their money and talk with the creditors try to find solutions for paying back. I worked for a NGO and charitable institution and we helped so people out of their debts. It take a long time, but important is to see how people spend their money and that they have to change that....Everything here seems to be a problem of the Government, but people are responsible for their own deeds

[RichardColeman]

Probably more due to Thais being unable to prioritise their debt and money coming in. Pay the mortgage or new phone and tv ?

[hotchilli]

13 hours ago, snoop1130 said:

Unless these debtors receive urgent help from the government, in the form of debt refinancing, he warned that these loans may become NPLs which, in the long run, will impact heavily on the Thai economy.

Why don't the mortgage lenders do the "refinancing" after-all they were the ones who agreed to grant the mortgages to people without certifying income to support repayments ?

 

[hotchilli]

11 hours ago, ikke1959 said:

It take a long time, but important is to see how people spend their money and that they have to change that.

I was taught to pay your bills and live on the rest.

Here it seems to be live first and sod the bills.

[SHA 2 BKK]

46 minutes ago, RichardColeman said:

Probably more due to Thais being unable to prioritise their debt and money coming in. Pay the mortgage or new phone and tv ?

Or play the Lottery - official and unofficial.  Then ask relatives for some cash to get by.   

[2baht]

52 minutes ago, RichardColeman said:

Probably more due to Thais being unable to prioritise their debt and money coming in. Pay the mortgage or new phone and tv ?

............and a Honda Click! 

[bamnutsak]

Time to break out the luxury "Digital Wallet" editions.

 

Gold 100,000

Platinum 1,000,000

 

 

[Cake Monster]

Firstly, if repayments are 1-3 months late they are classed as " special mention Loans ", not full blown NPL

However, a very high percentage of these Loans will transform into NPL

Much, if not all of this Debt has to be placed firmly on the Shoulders of the lenders

These unscrupulous Lenders have lent money to people in the pursuit of Profits and Greed, knowing full well that there is little hope of ever seeing their Money back, and praying there will be a Government bail out to prevent another To Yam Gung Crisis of 1997

The vast majority of Thai people have very little or no Financial Nounce what-so- ever, and are easy targets

Their philosophy upon life is to live for Today only, and many do not change their lifetime habits of drinking and smoking and generally having a good time if they have the Money

 

[jimgilly]

Get ready for the dominoes to start falling as all this unpayable debt continues to skyrocket. 

 

First, the consumer defaults which then drains the banks as their cash inflows continue to decrease requiring government assistance which itself does not have the funds to bail them all out.

 

Money printing starts sending inflation through the roof which in turn brings down the currency making things even worse.   The same thing is playing out in the US and this, along with several other things will dethrone the US from its current world position.

 

All in all, the coming months are going to prove quite challenging which is probably a great understatement to where things are headed.  Those not fully prepared are going to be in for the shock of their lives and all this is just around the corner.  Tic toc, tic toc........

 

[Almer]

16 hours ago, StayinThailand2much said:

Funny, I remember reading a few posts of news announcements by Thai banks in recent months on this very forum that there is 'no reason to worry, as NPLs are less than 2% of all loans'... - What has changed over the past two or three months that housing loan defaults are suddenly a big worry?

Somebody checked the figures

 

3 hours ago, SHA 2 BKK said:

Or play the Lottery - official and unofficial.  Then ask relatives for some cash to get by.   

Mrs won 19.000 a while ago, after she had given money to everybody she knew and had couple of BBQ nights, i asked how much she had left and how much she had played the lottery the last 12 months, when I get the answer I will edit this post or better still  forget I asked her

[retarius]

Nearly 20 billion USD? Or am I missing a zero or two? Why would houses be any different to cars? I wonder what the number of 'big-face-making' cars and pick-ups have been repossessed? Debt is a poor strategy to live by, I am allergic to it, and I certainly wouldn't go into debt to buy a car here in Thailand. And I have no mortgage on my house either. Totally debt free and have been for over 30 years. We have a husband and wife who work for us. They live in a rented room, and have an 8000 a month car payment for a 4X4 Isuzu taken over 7 years. What on earth are they thinking?

Edited February 27 by retarius

[BenStark]

If you have more than 1 million in the bank, it may be the right time to consider filling the pillow cases on your bed with something else than a pillow

[spidermike007]

The Thai economy is in far worse condition than the officials like to admit, the Prayuth Decimation continues to affect the nation on countless levels, and I don't think things are going to get better anytime soon. 

 

Keep in mind we still have extremely incompetent army goons within the administration, and Sretta  is finance minister in addition to being PM. That was a mistake of historic proportions.

 

Sometimes a mistake is wearing white after Labor Day in New York City, other times a mistake is invading Russia with the approach of winter. 

[itsari]

I remember a government Bank house loan the lady of the house once had the interest rate would raise to 30 percent when in arrears. 

If that is normal I can well understand that the Thai borrowers are in a sticky situation when behind in there morgage payments.

 

[Tailwagsdog]

Government bailout ...ha ha ha ..nobody is buying government bonds or debt anymore. So where will they get the money ????

[lapamita]

5 hours ago, Cake Monster said:

and praying there will be a Government bail out to prevent another To Yam Gung Crisis of 1997

the 1997 crisis was completly diffrent, than today. In 1997 it was more or less a finiancial market crash and a small group of rich thais loose money, the normal population was nearly unaffected ,due to nealr no outstanding depts ( bcs for most credits was not aviable), and the total ammount involved was  only a fraction of the money today.

 

today situation is diffrent , high depts in consumers compare to 1997 , and growth prospective are bad,as well an housing bubble , today it will be an " all in crisis" , with summs of credit involved ,what are not compareable to 1998 ,and even not compareable  in terms of Gdp vs dept ratio

5 hours ago, Cake Monster said:

 

 

[Dogmatix]

Wow. That is around 4% of GDP. How about the defaults on consumer debt which is more that mortgage debt?

[Cake Monster]

20 hours ago, itsari said:

I remember a government Bank house loan the lady of the house once had the interest rate would raise to 30 percent when in arrears. 

If that is normal I can well understand that the Thai borrowers are in a sticky situation when behind in there morgage payments.

 

The BOT day rate of 2.5% is probably the lowest rate in SE Asia

If ethical and responsible lending was applied instead of the current gouging employed by the Lenders there would be no problem.

With Household Debt regularly posted at over 16 Trillion Baht, the recently published numbers for current Debt outstanding is " special Mention " and NPl " in the region of 1.3 Trillion 

That as a percentage is roughly 8.13 % 

Why are figures of 2,5 % on bad debt seen published

Who are the Authorities trying to fool

 

Edited February 28 by Cake Monster

[itsari]

1 hour ago, Cake Monster said:

The BOT day rate of 2.5% is probably the lowest rate in SE Asia

If ethical and responsible lending was applied instead of the current gouging employed by the Lenders there would be no problem.

With Household Debt regularly posted at over 16 Trillion Baht, the recently published numbers for current Debt outstanding is " special Mention " and NPl " in the region of 1.3 Trillion 

That as a percentage is roughly 8.13 % 

Why are figures of 2,5 % on bad debt seen published

Who are the Authorities trying to fool

 

From what I understand about Thai banks is that if they declare that a loan is not recoverable then they must place an equal sum lost from the loan into there reserves, That would give the banks a problem so it is better to sit on there bad loans.