NPLs of banks expected to increase in Q4

BANGKOK, Aug 12 (TNA) -- Non-performing loans (NPLs) of commercial banks in Thailand are projected to further grow in the final quarter this year due to negative impact from large-scale certain industries, including mining sector, which have been affected from rising commodity prices, said a senior officer of the Bank of Thailand (BoT). Daranee Saeju, senior director of BoT’s Financial Institution Strategy, said bank’s’ NPLs in the second quarter this year stood at 2.95 per cent, up from 2.94 per cent of total loans in the first quarter. Loans quality of banks slipped because certain major debtors engaged in large-scale in mining and some industries were affected from rising commodity prices, said Ms Daranee. The situation has become worsen as loans given to minor small and medium enterprises continued increasing, she said. Touching on current flooding situation in several north and northeastern provinces, Ms Daranee said the problem would stay temporarily and commercial banks have already restructured debts for those debtors who have been affected from the flood and debts are not considered NPL. Cash reserves set aside by banks have steadily risen to 561 billion baht, she said, adding that loans granted by banks are expected to expand and meet target between 4-6 per cent. Reserves by banks in second quarter this year rose to 3.3 per cent, up from 2.8 per cent in the previous quarter, in line with the increase of the national economy, she said. Because of higher reserves set aside for doubtful NPLs, combined net profit for banks stood at 49 billion baht, down from 51 billion baht from the corresponding period of 2016, she added. (TNA)