NPLs continue rising in Q1

BANGKOK, May 14 (TNA) -- Non-performing loans (NPLs) continue increasing in Thailand due to slow national economic recovery while loans extended by commercial banks grew slightly during the first quarter this year, said Don Nakornthab, senior director of Bank of Thailand (BoT)’s Financial Institutions Strategy Department. Mr Don said the central bank believed that NPLs would soar to the highest level this year unless Thailand’s economy worsens in 2017 while BoT is closely monitoring NPLs of small and medium-sized enterprises (SMEs) and credit card holders. Loans extended by commercial banks during the first quarter this year grew only 3.3 per cent, down from 4.3 per cent growth at the end of 2015, said Mr Don. Loans in the SME sector retreated most followed by industrial and the commercial segments. Outstanding NPLs during the first quarter of 2016 stood at 357.4 billion baht, up 19.9 billion baht at end-2015, causing gross NPLs to rise higher to 2.64 per cent from 2.55 per cent in last year’s final quarter, he said. NPLs in SMEs segment during the period stood at 172.6 billion baht, up from 165.2 billion baht while NPLs from credit card holders were at 9 billion baht, up from 8.5 billion baht. Net profits by commercial banks are expected to continue slow down for the second consecutive year after banks have set aside a higher capital reserves after they have been affected by a cut of lending interests to assist SME businesses. According to Mr Don, commercial banks enjoyed operating profits at 100 billion baht during the first quarter this year, an increase of 15.8 per cent year-on-year. As banks have to set aside a higher capital reserves to cushion against bad loans, their net profits stood at only 51.3 billion baht, up 1.7 per cent y-o-y, he added. (TNA)