The Bank of Thailand (BOT) has announced that Thai banks’ non-performing loans decreased to 2.73% of total lending at the end of December 2022, down from 2.77% at the end of September.
The reduction in bad loans was due to successful debt restructuring efforts. The BOT statement assured that the banking system remained strong with high levels of capital, loan-loss provisions and liquidity, adding that it would support the economic recovery and future lending.
Assistant Governor Suwannee Jatsadasak said at a news conference that while bad loans are likely to increase, the existing debt measures are sufficient to support vulnerable groups. She also said the agency would continue to monitor the debt servicing of households, which remained fragile, and the recovery of some business groups.
The BOT reported that loans grew 2.1% in 2022. However, this was slower than the 6.5% rise in the previous year, partly due to large businesses’ debt repayments.
The Thai economy unexpectedly contracted in the final quarter of 2022 from the previous three months, and the full-year annual growth was 2.6%, compared to a 1.5% expansion in the previous year. The state planning agency predicted economic growth of 2.7% to 3.7% in 2023. (NNT)
