UPDATE 1-Bad debts of Thai banks could gradually increase amid outbreak – c.bank
* NPL at 3.12% of loans at the end of 2020 vs 2.98% at the end of 2019
* Loans up 5.1% last year vs. 2% in 2019
* Banking system remains strong, capital high – official (add details, loan)
BANGKOK, Feb.22 (Reuters) – Bad debts at Thai commercial banks could rise further, but lenders should be able to manage them, a senior central bank manager said on Monday as the economy grapples with the impacts from a recent coronavirus outbreak.
The banking system has remained strong with capital reserves and high liquidity, Suwannee Jatsadasak told reporters.
Non-performing loans (NPLs) reached 3.12% of total loans at the end of last year, up from 2.98% at the end of 2019, she said.
Overall, non-performing loans increased slightly as debtors affected by COVID received help from banks, she said.
However, loans with a significant increase in credit risk jumped to 6.62% of total loans at the end of 2020, from 2.79% in 2019, Suwannee said.
“This is what we need to watch out for. If the banks continue to help them, they will not become NPLs. Otherwise, they could do it, ”she added.
Banks have loaned around 400 billion baht ($ 13.3 billion) to the hardest hit sector, tourism, which is in dire need of continued support, she said.
Thailand’s outstanding debt under financial assistance programs stood at around 4.84 trillion, or 28.8 percent of total loans, at the end of December, compared with 7.2 trillion at the end of July, the Bank of China said. Thailand (BOT).
In 2020, all bank loans increased by 5.1%, after an increase of 2% in 2019, driven by loans to large companies.
Having brought its first coronavirus outbreak under control in months last year, Thailand is facing a second wave of infections that has slowed activity.
Suwannee said about 126 billion baht of BOT’s 500 billion baht soft loan program to help small businesses was approved on February 8.
The program is part of a 1.9 trillion baht government program to mitigate the impact of the coronavirus pandemic on Southeast Asia’s second-largest economy, which has suffered its deepest collapse in more than two years. decades last year. ($ 1 = 30.04 baht) (Additional report by Kitiphong Thaichareon edited by Martin Petty)