Bad loans from Thai commercial banks are flat later this year – cenbank
* Bad debts at 3.09% of outstandings at the end of June vs. 3.04% at the end of March
* Loans have increased by around 5% this year
* Said that the banks’ positions are solid but that the risks remain
BANGKOK, Aug. 17 (Reuters) – Bad debts at commercial banks in Thailand edged up in the second quarter and are expected to stabilize later in the year due to measures to help debtors affected by the coronavirus pandemic, announced Monday the central bank.
Non-performing loans (NPL) reached 3.09% of total loans at the end of June, up from 3.04% in March, said Tharith Panpiemras, senior manager of the Bank of Thailand (BOT), at a briefing. hurry.
The BOT has discussed with the banks the possibility of helping debtors when current relief measures end in October, such as moratoriums and debt restructuring, he said.
“There will always be measures to help debtors and businesses, but they will be more targeted and not more general,” Tharith added.
Despite the economic woes, bank lending rose 5% in the first half of 2020, as large companies sought loans amid tight liquidity and a volatile bond market, he said, adding that loans are expected. increase by about 5% this year.
Financial institutions remain strong with high capital positions, he said, while a preliminary stress test has shown they can handle the situation this year.
“But worry is more likely next year,” he said.
In June, the BOT asked banks to prepare capital management plans for the next 1-3 years and to suspend interim dividends and share buybacks for 2020 in order to assess their capital levels after COVID-19. .
The results of the 2021-2022 stress test will be known in October.
Southeast Asia’s second-largest economy shrank 12.2 percent in April-June from the previous year, the strongest since 1998, as the pandemic hit tourism and domestic activity.
The contraction was still lower than BOT expected and the economy should have bottomed out, although great uncertainty remains, BOT senior manager Don Nakornthab said in a statement.
The BOT has forecast a record 8.1% economic contraction this year and will revisit that at its rate meeting next month.
Reporting by Kitiphong Thaichareon and Orathai Sriring; Editing by Martin Petty