Last year's outstanding non-performing loans (NPLs) continued their rise as the debt-servicing ability of households and businesses was affected by the slow domestic economic recovery, says the Bank of Thailand.
Gross NPLs in 2015 totalled 2.56%, valued at 338 billion baht, up from 2.2% in 2014 with a value of 278 billion, according to central bank data.
Last year's net NPLs rose to 1.21%, valued at 158 billion baht, up from 1.1% at 138 billion a year earlier. NPLs are classified as loans more than 90 days overdue, while net NPLs include provisioning.
"The moderate economic recovery conditions and deterioration in debt-servicing ability among households and businesses has affected loan quality and the revenue of financial institutions," according to a central bank report entitled "Assessment of Thailand's Financial Stability 2015".
"The loan quality of commercial banks has deteriorated in every segment of debtors, particularly small and medium-sized enterprises (SMEs) and retail debtors. A major steel debtor experienced problems with its business overseas."
The gross NPLs of 11 SET-listed banks show Thanachart Bank was the only lender to lower its bad loans, down to 21.7 billion baht last year from 32.8 billion in 2014.
NPLs among SMEs rose to 3.61% in last year's third quarter or 167 billion baht in value, up from 3.44% or 159 billion in the second quarter.
Bad loans in the consumer loan segment increased to 2.76% from July-September 2015, valued at 100 billion baht, up from 2.65% at 94.4 billion three months prior.
Outstanding NPLs in last year's third quarter climbed to 2.78%, valued at 361 billion baht, a considerable increase from 2.38% and 312 billion in the previous quarter.
The spike in bad loans from July-September was mainly attributed to a jump in corporate NPLs based on debt-ridden Sahaviriya Steel Industries Plc suffering hefty losses.
Typical loan growth expansion in the final quarter and banks implementing debt restructuring between October and December were possible reasons for the dip in outstanding NPLs to 2.56% in the fourth quarter, down from 2.78% in the preceding quarter, said an informed source who asked for anonymity.
The central bank earlier raised its GDP growth forecast for 2015 to 2.8% from 2.7%, citing higher public expenditure and private consumption as the main factors.
The National Economic and Social Development Board will announce both fourth-quarter and full-year GDP growth for 2015 on Feb 16.