Commercial banks' non-performing (NPL) and special mention loans (SMs) for small and medium-sized enterprises (SMEs), automobiles and credit cards at the end of September ticked up from the previous three months, resulting in a higher potential for more soured loans.
NPLs for SMEs edged higher to 4.65% of loans outstanding at the end of September from 4.45% at the end of June, and SMs potentially at risk of becoming NPLs increased to 2.63% from 2.61% over the same period, said the Bank of Thailand.
"Despite the economic recovery momentum, SMEs have not fully benefited. It will take more time to improve the asset quality of the loan segment and show the NPL ratio has not peaked yet," said Somchai Lertlarpwasin, the central bank's senior director for financial institutions strategy.
SMEs have reported that financial liquidity is still tight as the economic uptick, driven largely by exports, has not trickled down.
According to SME NPLs broken down by sector, those in industry, commerce, service, real estate, construction and infrastructure saw soured loans increase at the end of September from the previous three months, while financial services was the only category where NPLs fell.
Soured loans in the SME construction sector were the highest at 7.03% at the end of September among other sectors, up from 7.02% at the end of June, followed by the industrial sector at 6.91%, which rose from 6.3%, and the commercial sector at 6.63%, which increased from 6.48%.
The increase in NPLs of manufacturing and commerce sectors can be attributed to tougher competition from the e-commerce business and modern trade filtering into provincial markets, he said.
The Bank of Thailand data also showed the build-up of both NPLs and SMs of auto and credit card loans at the end of the third quarter from the previous quarter.
Auto bad loans rose marginally to 1.57% of the car loans at the end of September from 1.52% at the end of June. SMs -- those 1-3 months overdue -- inched up to 7.32% from 7.25%.
Credit card NPLs accelerated to 2.54% at the end of September from 2.42% at the end of June, and the potential future NPLs of credit cards rose to 1.96% from 1.89% over the same period.
Commercial lenders' NPL slightly increased to 2.94% at the end of September from 2.93% at the end of June, and SMs climbed higher to 2.42% from 2.36%.
Soured loans in the corporate banking business, however, sank to 1.50% at the end of September from 1.70% at the end of June, and those of consumer loans fell to 3.18% from 3.22%.
Commercial banks' lending growth increased to 6.3% in the third quarter from 5.4% in the previous three months. Business loan growth rose to 5.2% from 4.1% for the same period. Corporate loans turned back to 0.6% growth from a 1.8% contraction and consumer loan accelerated to 8.4% from 8% over the same period.
SME loan growth, however, declined to 7.2% at end of September from 7.5% three months earlier.
Commercial banks' total loan growth this year will be in the Bank of Thailand's projection range of 6-8%, he said.
Banks' total impairment charges for loan-loss rose by 15.4 billion baht to 652 billion at the end of September from the end of June. The coverage ratio in the third quarter increased to 146.5% from 143% in the previous quarter and 139.5% at the end of 2017.