Thailand's Credit Card Industry Faces Toughest Test in 20 Years

[snoop1130]

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Thailand's credit card sector is staring down its most significant challenge in two decades, with a stagnant economy and tightening regulations threatening growth. Atis Ruchirawat of the Thai Bankers' Association warns of pending obstacles, with projections of sluggish economic performance into next year impacting consumer lending.

 

To cushion the sector, the Bank of Thailand has announced two reductions in interest rates for 2025. However, these measures, while aimed to aid borrowers, are expected to shrink industry profits. Further complicating matters, a new mandatory minimum payment increase from 5% to 8% could strain debtors' ability to keep up, potentially elevating non-performing loans (NPLs).

 

 

Despite these headwinds, Krungsri Consumer Group, a key player, forecasts a robust credit card and personal loan growth, aiming for a 6% to 9% rise in card spending. However, tighter asset quality controls may dampen loan approvals. The company is optimistic, projecting Thailand's GDP growth to reach 3% by 2025, and plans to issue 600,000 new credit cards in 2024. While challenges persist, Krungsri remains committed to expansion while maintaining stable NPL levels, which currently stand below industry averages.

 

-- 2024-12-20

 

 

[OneMoreFarang]

It seems to me too many people have huge credit card debt with huge interest rates.

Restricting credit card companies is good, not bad.