Bureau sees 15% hike in overall NPLs
Q1 uptick attributed to payment defaults
The National Credit Bureau (NCB) recorded a 15% increase in overall non-performing loans (NPLs) in the first quarter of this year, primarily driven by auto and mortgage loan payment defaults.
The NCB’s data for the first quarter of 2024 reveals a rise in NPLs to 1.09 trillion baht, chiefly led by auto NPLs, which jumped by 32% to 240 billion baht, followed by housing NPLs, which increased by 18% to 1.99 billion baht.
Additionally, loans categorised as special mention (SM) — those with a debt default period exceeding 30 days but not exceeding 90 days — also saw an uptick, reaching 644 billion baht in the first quarter, a 7.3% year-onyear increase. The surge was fuelled by housing SMs, which amounted to roughly 187 billion baht, marking a 15% increase, and auto SMs totalling 204 billion baht, representing a 7.1% rise.
Meanwhile, credit card SMs surged to 11.7 billion baht, up 32.4% from the same quarter of last year, partially attributed to the recent adjustment in the central bank’s minimum payment regulation from 5% to 8%, effective as of Jan 1, 2024.
Surapol Opastien, the NCB’s chief executive, noted on his Facebook page yesterday that the rise in both total NPLs and SMs during the first quarter of this year reflects Thailand’s uneven economic recovery, characterised by a K-shaped trajectory.
Consequently, individuals’ incomes have not yet seen a widespread recovery, and many people are still grappling with the burden of a higher cost of living, thus diminishing their capacity to repay their debts.
“Given the K-shaped economic rebound amidst the country’s elevated household debt, there is a possibility of SMs transitioning into NPLs,” Mr Surapol said.
To alleviate the burden on housing loan borrowers, financial institutions have extended financial assistance and implemented debt restructuring measures.
At the same time, major local banks have announced reductions in loan interest rates, tailored to the business model of each bank, for a period of six months to assist vulnerable clients.
Mr Surapol said these measures would alleviate the debt burden of housing loan borrowers. However, he also pointed out that similar measures have not been widely implemented for auto loan services as of now.
In addition, banks have been increasingly stringent in approving new loans to control credit risk in light of the current economic conditions, he said.
According to NCB data, total household debts in the first quarter of 2024 amounted to 13.6 trillion baht, with new loans experiencing marginal growth of 2.9% year-on-year. Housing loans saw a 3.8% increase, while auto loans dropped by 1.5%. Commercial and overdraft loans related to business operations contracted by 5.7% and 5%, respectively.
With the slower pace of loan expansion, Thailand’s household debt-toGDP ratio is expected to decline for the first quarter of this year.
According to the central bank’s latest reports, Thailand’s household debt-toGDP ratio stands at 91.3%.
Regarding household debt account numbers, according to the NCB’s data there were about 84.4 million accounts in the first quarter of 2024, representing a 1.2% year-on-year increase. Housing, auto and personal loan accounts experienced contractions of 1%, 2% and 0.9%, respectively, while credit card accounts showed a growth rate of 1.5%.