BANGKOK: Commercial banks’ non-performing loans (NPLs) rose considerably in the first quarter, mainly attributed to credit cards and businesses, says a senior Bank of Thailand official. Gross NPLs climbed higher to 2.64% with an outstanding value of 357 billion baht, up from 2.55% valued at 338 billion baht in last year’s final quarter, said Don Nakornthab, a senior director of the financial institutions strategy department.
“Improved adjustment in NPLs is not foreseen in the short run, but an increase in NPL ratio in the second quarter is not expected to be high, judging from a decline the first quarter’s ratio of special-mention loans,” he said. Special-mention loans are defined as those with repayments 30-90 days overdue. Outstanding special-mention loans reduced to 2.26% with a value of 305.9 billion baht in the first quarter, down from 2.38% with a value of 314.1 billion baht in the previous quarter.
But Mr Don conceded that NPLs and special-mention loans in the small and medium-sized enterprise (SME) segment still warrant concern because of their upward trend, while credit card loans can be used as proxies for SME loans. The ratio of SME NPLs rose to 3.69% in the first quarter, amounting to 172.6 billion baht, up from the fourth quarter’s 3.5% valued at 165.2 billion baht. Special-mention loans in the SME sector increased to 2.24% totalling 104.6 billion baht, up from 2.19% valued at 103.5 billion baht.
