BBL to see bad loans jumping to 3%
Bangkok Bank (BBL) estimates its non-performing loans (NPLs) will climb to as high as 3% next year because of the continuing lacklustre economy.
Bad loans at the country’s largest lender by assets are expected to reach 2.7% to 2.8% of total lending at year-end from 2.5% at the end of September, executive director Deja Tulananda said.
“The slowdown in the domestic and global economies remains, and this is pushing up the bank’s NPLs, with retail loans the main contributor,” he said, adding that BBL’s loan-loss reserve had risen to 12 billion baht this year.
BBL’s assistance to its financially troubled borrowers by offering them interest rate cuts and debt rescheduling would help many of them remain servicing debt as normal, he said.
Boontuck Wungcharoen, chairman of the Thai Bankers’ Association, echoed Mr Deja’s views, predicting NPLs in the overall banking industry would peak above 3% of outstanding loans by the end of 2016 due to the sluggish economy.
At the end of this year’s third quarter, overall NPLs stood at 2.79%, up from 2.38% in the second quarter.
Mr Deja said BBL expected 4% lending growth next year, similar to this year.
The 4% forecast for 2016 is based on the assumption that Thai economic growth will come in at 3% to 3.5%, he said, adding that corporate, SME and retail loans would contribute.
The lending growth target is low as the economy remains murky, particularly for the first half, Mr Deja said.
BBL posted a third-quarter net profit of 9.06 billion baht, down by 5.4% year-on-year.
It put aside 4.87 billion baht for provisions in the third quarter, up from 3.13 billion in the same period last year.
In a related development, Mr Deja said BBL was ready to extend loans to any winners of the 900-megahertz spectrum licence auction. The mobile industry is low risk, and all the companies have strong financial positions, he said.
The bank’s excessive liquidity can serve the licence winners’ loan demand, he said, adding that BBL had not been approached by any bidders yet.
BBL shares closed yesterday on the Stock Exchange of Thailand at 157 baht, unchanged, in trade worth 642 million baht.