More Thais to default on their loans due to increased household debts: NESDB

[Mackie]

During the reign of the previous administration banks were handing out so called toxic loans to Thais without actually doing any proper checks. The excuse was everyone deserves to get on the property ladder, especially in Bangkok. The same scheme was applied in the USA/UK and we all know that it ended up in tears for many. Handing out toxic loans forced the price up. For example, a square metre of a newly build condo in Bangkok central areas has already gone over 100,000 baht per square metre. Average price is between 3,000-3,500 USD. It's an artificially created bubble which will inevitably burst and many Thais will get hurt in the process.

[MaxYakov]

A few years ago, I wanted to apply for a Visa Card at my Bank provider.

I have always about 800,000 baht in my Savings Account and about 200,000 baht in my Current Account.

The application was refused by the Bank.

My ex-wife, who had no job and her only income was what I gave her possessed a Visa Card from every possible provider in Thailand and also many Debet cards.

She applied for a Visa Card at the same Bank as me and got it approved.

<deleted> the Thai banks.

Just for grins, you should talk to a manager at the bank and indicate that you will change banks if you aren't issued one to see what they say. Maybe they thought you were not a serious farang with all that cash available.

Or maybe you can ultimately find out the real reason why they refused the card. If you are refused, make good on your threat. Find a bank that will issue the card if you are willing to keep around 1M baht in deposit.

Maybe they've been burned too many times by "living on the edge financially in Thailand" farangs. I had one of those who admitted to reneging on $60K of credit card debt (with a seeming attitude that the financial system or society owed it to him)

Edited June 4, 2014 by MaxYakov

[Mudcrab]

Apart from that, 11.4 million households across Thailand had only 100,000 baht or less in their savings. Only 700,000 households were able to accumulate up to 500,000 baht of savings or higher

Probably doing better than most in the west. A lot of people in the west live from pay day to pay day i.e no savings at all.

[billd766]

I'm waiting for the posters in that other thread a few days ago who claimed that most Thais earn 40.000 a month these days.

Note that in this OP they have adjusted the 25.200 Baht per Thai person to per household. Huge difference

My 17 year old nephew earns 6,500 baht per month and quit school when he was 16 as he considered himself to clever for school. He has the intelligence of a coomon rock but lacks the social skills of the rock. He spends more than he earns as his grandmother supports him.

My niece at 22 however is the first person in the family to go through Uni and has a degree in Business Studies. She has a better job and earns 13,500 baht per month and her debts are Uni fees. So much for ther promised 15,000 baht per month for Uni graxduates as promised by the PTP.

[DrTuner]

On the bright side: this time there aren't any leveraged instruments based on those sub-prime NPL's ...... are there ?

[robblok]

I'm waiting for the posters in that other thread a few days ago who claimed that most Thais earn 40.000 a month these days.

Note that in this OP they have adjusted the 25.200 Baht per Thai person to per household. Huge difference

My 17 year old nephew earns 6,500 baht per month and quit school when he was 16 as he considered himself to clever for school. He has the intelligence of a coomon rock but lacks the social skills of the rock. He spends more than he earns as his grandmother supports him.

My niece at 22 however is the first person in the family to go through Uni and has a degree in Business Studies. She has a better job and earns 13,500 baht per month and her debts are Uni fees. So much for ther promised 15,000 baht per month for Uni graxduates as promised by the PTP.

These are young people.. as people age even here they will make more money.

Not having a go at you but if she goes on a few years she will have the 20k that some farangs say is impossible to make.

[Robby nz]

Sure I remember reading not long back that the Islamic Bank, a Govt owned bank we hear very little about had NPL's of over 30 %.

[billd766]

I'm waiting for the posters in that other thread a few days ago who claimed that most Thais earn 40.000 a month these days.

Note that in this OP they have adjusted the 25.200 Baht per Thai person to per household. Huge difference

My 17 year old nephew earns 6,500 baht per month and quit school when he was 16 as he considered himself to clever for school. He has the intelligence of a coomon rock but lacks the social skills of the rock. He spends more than he earns as his grandmother supports him.

My niece at 22 however is the first person in the family to go through Uni and has a degree in Business Studies. She has a better job and earns 13,500 baht per month and her debts are Uni fees. So much for ther promised 15,000 baht per month for Uni graxduates as promised by the PTP.

These are young people.. as people age even here they will make more money.

Not having a go at you but if she goes on a few years she will have the 20k that some farangs say is impossible to make.

I have no doubtthat she will as she is a very determined lass. Her brother on the other would be be classified as NAAFI and always will.

No

Ambition

And

Frack all

Interest

At his age I had been in the military for over 2 years and loved it.

At 11 years old I knew that I wanted to join the military and be a pilot, navigator or a cook. (Don't ask about cook)

I ended up as an aircraft Radio Engineer for 25 years which stood me in great stead for the next 25 years.

[Dogmatix]

A few years ago, I wanted to apply for a Visa Card at my Bank provider.

I have always about 800,000 baht in my Savings Account and about 200,000 baht in my Current Account.

The application was refused by the Bank.

My ex-wife, who had no job and her only income was what I gave her possessed a Visa Card from every possible provider in Thailand and also many Debet cards.

She applied for a Visa Card at the same Bank as me and got it approved.

<deleted> the Thai banks.

The Bank of Thailand requires credit card issuers not give cards to people earning less than a certain amount - c15,000 a month I think. Sounds like the bank was stretching a point giving a card to your wife but was correct in not issuing one to you, if you have no job in Thailand. But you should be able to get a Visa debit card from any Thai bank with no problem.

In the past some banks refused to issue credit cards to foreigners at all or required you to leave a deposit equivalent to your credit limit, even if you had a job. Nowadays there is not much discrimination. You are likely to get a card with the same credit limit as a Thai earning the same salary with no deposit.

Edited June 4, 2014 by Dogmatix

[northernjohn]

During the first three months of this year, defaults on loans longer than a three month period has increased to 42 percent.

Increased 'to' 42 percent ?? Or increased 'by' 42 percent.. Kind of a key difference and I firmly disbelieve the former.

A 42% default rate on all debts over 3 months would imply a systemic banking collapse.

Gee duh I wonder if the post said by or to. I think I will not bother to read the post and see how many dimwits I can get to not believe the post.

Sarcasm if you don't understand it get some one to explain it to you.

Edited June 4, 2014 by northernjohn

[northernjohn]

I don't think Thais are very good at managing a budget ,my wife is a good example,i

try to instill in her the most important thing in managing ones finances,NEVER spend

more than you earn.and i don't think they would know how to cut back if money gets

tight,its not only Thais but most of the World must be in debit,I suppose the population

are just following their countries example.Its i must have it now society.

regards worgeordie

I would have agreed with you until a few months ago. I have believed the wife just spent all the money. Until about 6 months ago when she said her son needed another 7,000 baht to graduate from collage. She then told me she had the money. To be honest I was pleasantly shocked.

[northernjohn]

well done Taksin and clan etc keep peasants where they belong so 10+ years of mostly Taksin regime and poor are screwed in some ways serves them right for voting and worshiping the scumbag and believing all lies

And as for red shirt thugs how brave the are aren't they slightest thrust to them form army and they all run like frightened rabbits

A last hurrah from all you naive red shirt Taksin supporters shall we

Come on someone support this load of low life the Taksin clan and hangers on come on but like those who would and will never admit the holicost or evils of regimes I'm sure an umber will go to their deaths supporting vile dictators and are so brainwashed, naive can i say stupid to believe they are right

mods delete if you think to insulting but they can't help it i guess

I notice since the cash flow from Dubai has stopped there is not much coming from the red shirts. They too have bills to pay and will not be getting the extra money from Thaksin. Give them a few months and check back on them and ask them how much better off they are now with out the money from Thaksin. Just having to earn their living like every one else.

Edited June 4, 2014 by northernjohn

[allan michaud]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I don't think Thais are very good at managing a budget ,my wife is a good example,i

try to instill in her the most important thing in managing ones finances,NEVER spend

more than you earn.and i don't think they would know how to cut back if money gets

tight,its not only Thais but most of the World must be in debit,I suppose the population

are just following their countries example.Its i must have it now society.

regards worgeordie

Debt is what keeps the uber rich where they are, thanks to our wonderful global banking system. Thai's however, do seem very good at buying stuff they don't need or cannot afford, if my wife is anything to go by.

[englishoak]

I don't think Thais are very good at managing a budget ,my wife is a good example,i

try to instill in her the most important thing in managing ones finances,NEVER spend

more than you earn.and i don't think they would know how to cut back if money gets

tight,its not only Thais but most of the World must be in debit,I suppose the population

are just following their countries example.Its i must have it now society.

regards worgeordie

I doubt its a Thai thing, I know of plenty of such people in the Netherlands too.

Now it is also the faults of the banks with their easy loans.

There are also plenty of Thais that do have good finances, usually the middle class.

And the middle class represents what part of the Thai population ?

2% ??

You should look further as the end of your soi .

I think you got that wrong! It would be about 1% of the population who are the richest. The middle class would make up about 40% of the Population even here in Thailand. Your first question makes no sense!

What would you say is middle class exactly and how would you define it and based on what exactly ? claiming 40% of the population here is middle class takes some doing.

glaring facts: 2009

- The top 20% own 69% of the country's assets while the bottom 20% own only 1%.

- 42% of bank savings money comes from only 70,000 bank accounts holding more than 10 million baht. They make up only 0.09% of all bank accounts in the country. In other words, less than 1% of the people own nearly half of the country's savings.

- Among the farming families, nearly 20% of them are landless, or about 811,871 families, while 1-1.5 million farming families are tenants or struggling with insufficient land.

- 10% of land owners own more than 100 rai each, while the rest 90% own one rai or less.

- On income distribution, the top 20% enjoy more than 50% of the gross domestic product while the bottom 20% only 4%.

- The average income of the bottom 20% is the same as the poverty line at 1,443 baht per month.

I would say middle class makes up much much less than 40% of the population, youd be forgiven thinking it was though if just sticking to bangkok or Phuket and other cities .... whats the rural % of the population and its monthly earning on average ? You do the math,

interestingly still only 35% of Britons consider themselves middle class I doubt its that here a lot less id say in real terms.

[Robby nz]

well done Taksin and clan etc keep peasants where they belong so 10+ years of mostly Taksin regime and poor are screwed in some ways serves them right for voting and worshiping the scumbag and believing all lies

And as for red shirt thugs how brave the are aren't they slightest thrust to them form army and they all run like frightened rabbits

A last hurrah from all you naive red shirt Taksin supporters shall we

Come on someone support this load of low life the Taksin clan and hangers on come on but like those who would and will never admit the holicost or evils of regimes I'm sure an umber will go to their deaths supporting vile dictators and are so brainwashed, naive can i say stupid to believe they are right

mods delete if you think to insulting but they can't help it i guess

I notice since the cash flow from Dubai has stopped there is not much coming from the red shirts. They too have bills to pay and will not be getting the extra money from Thaksin. Give them a few months and check back on them and ask them how much better off they are now with out the money from Thaksin. Just having to earn their living like every one else.

Could possibly be because Thaksins wealth has dropped, spent to much on them already for no return.

Still No 10 on the Forbs Thailand 2014 rich list but now down to only :

That is billions of Thai Baht

[geronimo]

I think banks need to determine what people can reasonably afford to pay when undertaking a loan agreement, , credit here is to easily available , with the latest downturn in the economy i would expect to see a huge increase in loan defaults , Cars , Homes , Phones, and credit cards.and of course business loans.

For those who don't understand how banking works ....

First they print loads of money, which gets circulated, Everyone is happy, the small company down the road takes out a loan to expand,, Mr and Mrs Bloggs buy a bigger house etc etc. All seems well ... until the banks hike the interest up. Now all that extra money is not being circulated in the economy anymore, it is being paid back to the banks in interest payments. Then comes the foreclosure (which is what the banks want) and there you have it. It isn't your money they want, rather the assets you bought with it. Oh and I forgot,when the banks &lt;deleted&gt; up, they get bailed out by the government, which is paid for by .. us.

And here;s the thing that amazes me, it is perfectly legal!!!!

[robblok]

I think banks need to determine what people can reasonably afford to pay when undertaking a loan agreement, , credit here is to easily available , with the latest downturn in the economy i would expect to see a huge increase in loan defaults , Cars , Homes , Phones, and credit cards.and of course business loans.

For those who don't understand how banking works ....

First they print loads of money, which gets circulated, Everyone is happy, the small company down the road takes out a loan to expand,, Mr and Mrs Bloggs buy a bigger house etc etc. All seems well ... until the banks hike the interest up. Now all that extra money is not being circulated in the economy anymore, it is being paid back to the banks in interest payments. Then comes the foreclosure (which is what the banks want) and there you have it. It isn't your money they want, rather the assets you bought with it. Oh and I forgot,when the banks <deleted> up, they get bailed out by the government, which is paid for by .. us.

And here;s the thing that amazes me, it is perfectly legal!!!!

Yes because there is no free will.. and because people don't think that interest can raise. But for your information the last years in the EU the interest has only fallen.. now there goes your theory. Banks don't want your property its a hassle they just want an interest payment and that is it.

Oh and you can also pay a fixed percentage of interest you pay above market rate but then you are sure that for a given period your interest wont raise.

[geronimo]

I think banks need to determine what people can reasonably afford to pay when undertaking a loan agreement, , credit here is to easily available , with the latest downturn in the economy i would expect to see a huge increase in loan defaults , Cars , Homes , Phones, and credit cards.and of course business loans.

For those who don't understand how banking works ....

First they print loads of money, which gets circulated, Everyone is happy, the small company down the road takes out a loan to expand,, Mr and Mrs Bloggs buy a bigger house etc etc. All seems well ... until the banks hike the interest up. Now all that extra money is not being circulated in the economy anymore, it is being paid back to the banks in interest payments. Then comes the foreclosure (which is what the banks want) and there you have it. It isn't your money they want, rather the assets you bought with it. Oh and I forgot,when the banks <deleted> up, they get bailed out by the government, which is paid for by .. us.

And here;s the thing that amazes me, it is perfectly legal!!!!

Yes because there is no free will.. and because people don't think that interest can raise. But for your information the last years in the EU the interest has only fallen.. now there goes your theory. Banks don't want your property its a hassle they just want an interest payment and that is it.

Oh and you can also pay a fixed percentage of interest you pay above market rate but then you are sure that for a given period your interest wont raise.

I agree that the banks may not always want the assets that guarantee the loan, but they are legally stealing from us all.

[geronimo]

I think banks need to determine what people can reasonably afford to pay when undertaking a loan agreement, , credit here is to easily available , with the latest downturn in the economy i would expect to see a huge increase in loan defaults , Cars , Homes , Phones, and credit cards.and of course business loans.

For those who don't understand how banking works ....

First they print loads of money, which gets circulated, Everyone is happy, the small company down the road takes out a loan to expand,, Mr and Mrs Bloggs buy a bigger house etc etc. All seems well ... until the banks hike the interest up. Now all that extra money is not being circulated in the economy anymore, it is being paid back to the banks in interest payments. Then comes the foreclosure (which is what the banks want) and there you have it. It isn't your money they want, rather the assets you bought with it. Oh and I forgot,when the banks <deleted> up, they get bailed out by the government, which is paid for by .. us.

And here;s the thing that amazes me, it is perfectly legal!!!!

Yes because there is no free will.. and because people don't think that interest can raise. But for your information the last years in the EU the interest has only fallen.. now there goes your theory. Banks don't want your property its a hassle they just want an interest payment and that is it.

Oh and you can also pay a fixed percentage of interest you pay above market rate but then you are sure that for a given period your interest wont raise.

I agree that the banks may not always want the assets that guarantee the loan, but they are legally stealing from us all.

The Federal Reserve is privately owned, disguised as a Government institution and was created for this very purpose.

[skorchio]

cmon lets start the Thaksin blame game, all his fault

[fletchsmile]

Poorly written article from a non-native English speaker, who isn't really able to write in context.

Yes NPLs for banks may rise this year. Might see around 4% instead of 3% of total loans - I assume that's what they mean by a 30%+ increase..........

To be honest though difficult to tell what they are actually talking about as it's so poorly written. Followed the link to the source... NNT

Cheers

Fletch

[BlackJack]

buy a motor bike

99 baht down and pay the rest off

2.5% per month

over how many years??

no wonder

[ttthailand]

Loosen up the purse strings and the economy grows in the short term. This is done when people in power are up for re-election and want to show a strong economy. In the long term however it has a negative affect as those who would be spending now have already done so before and now need to make payments and don't have money to spend..... Boom and Bust.

Also when the purse strings are loosened it normally gives money to those who can not afford the added expense.

The car refund deal was the same... Everyone buy now and the economy looks great but after everyone already has a car and the numbers go down below normal, decline.

Best to let the market self adjust. You avoid booms and busts.

Thailand is coming into a dark time very soon. Too much money spent on new phones, motor bikes, and cars. You know there is a lack of financial planning when people spend 25% of their income on a new phone and phone services....

[Daniel Boon]

I am unable to start a new topic ... anybody know of 'adverse possession' in this Forum

GentlemanJim

[marcusd]

I don't think Thais are very good at managing a budget ,my wife is a good example,i

try to instill in her the most important thing in managing ones finances,NEVER spend

more than you earn.and i don't think they would know how to cut back if money gets

tight,its not only Thais but most of the World must be in debit,I suppose the population

are just following their countries example.Its i must have it now society.

regards worgeordie

I doubt its a Thai thing, I know of plenty of such people in the Netherlands too.

Now it is also the faults of the banks with their easy loans.

There are also plenty of Thais that do have good finances, usually the middle class.

I do not blame banks or lenders AT ALL.

People borrow with large hungry eyes wanting everything NOW.

Borrow now pay later worry about it later.

Who makes people sign the contracts? No one stands over you with a shotgun.

People need to take responsibility for their own actions and not blame others

[marsstar14]

A few years ago, I wanted to apply for a Visa Card at my Bank provider.

I have always about 800,000 baht in my Savings Account and about 200,000 baht in my Current Account.

The application was refused by the Bank.

My ex-wife, who had no job and her only income was what I gave her possessed a Visa Card from every possible provider in Thailand and also many Debet cards.

She applied for a Visa Card at the same Bank as me and got it approved.

<deleted> the Thai banks.

Confuscious, I understand that it is frustrating when a case like this happens. However, most banks only comply with the rule that you need to have a source of income in order to obtain a credit card. So, it doesn't matter even if you're retired and have millions in your savings. It does sound like a stupid policy but who can change it?

[Oscar2]

I'm waiting for the posters in that other thread a few days ago who claimed that most Thais earn 40.000 a month these days.

Note that in this OP they have adjusted the 25.200 Baht per Thai person to per household. Huge difference

most, if not all the Thais I know earn between 40-75K per month on average. and many of them are not living beyond their means. 2 kids at a reasonably good school alone costs 120,000 Baht per term or 240,000 per year, car payments, health insurance, etc. the cost of living here has gone to the moon.

[Oscar2]

And the middle class represents what part of the Thai population ?

2% ??

rubbish!

[AnotherOneAmerican]

I'm waiting for the posters in that other thread a few days ago who claimed that most Thais earn 40.000 a month these days.

Note that in this OP they have adjusted the 25.200 Baht per Thai person to per household. Huge difference

most, if not all the Thais I know earn between 40-75K per month on average. and many of them are not living beyond their means. 2 kids at a reasonably good school alone costs 120,000 Baht per term or 240,000 per year, car payments, health insurance, etc. the cost of living here has gone to the moon.

+

The highest Thai earners I know are on 15k a month.

(School teacher with 10 years experience and hospital administrator).

You must be living in a different world to my family.

The house across the road from me has a total income of 50k (allegedly), but that is with 4 working adults (all professionals with degrees).

With the new house repayments, and two new car repayments, they were living there 6 months before they scraped enough money together to buy a fridge.

Edited June 7, 2014 by AnotherOneAmerican

[JesseFrank]

I'm waiting for the posters in that other thread a few days ago who claimed that most Thais earn 40.000 a month these days.

Note that in this OP they have adjusted the 25.200 Baht per Thai person to per household. Huge difference

most, if not all the Thais I know earn between 40-75K per month on average. and many of them are not living beyond their means. 2 kids at a reasonably good school alone costs 120,000 Baht per term or 240,000 per year, car payments, health insurance, etc. the cost of living here has gone to the moon.

It sounds as you know very few Thais.