Credits expanded only 2.4 percent in the third quarter of the year which was the lowest in six years while non-performing loans of the same period increased 2.89 percent, representing the highest in five years since the second quarter of 2011, said Mr Don Nakhontap, senior director of the Bank of Thailand on Thursday.
He pointed out that the 2.4 percent credit expansion was lower than growth rate and out of the total of 11.78 trillion of credits, 2.89 percent of them were NPLs and out of the total NPLs, 5.10 percent were NPLs incurred by credit card spendings – an increase from 4.25 percent – which was the highest in 11 years since 2005.
Mr Don predicted that NPLs this year had not peaked and was likely to peak in the first or second quarter of next year as commercial banks would have come up with better NPL management with debt restructuring or debt harcuts in the fourth quarter.
However, he assured that the increase of NPLs was not much of a matter of concern as commercial banks had set aside about 513.2 billion baht as reserves. The entire net profits of the banking industry amounted to 49.8 billion baht.
