BBL forecasts bad-loan peak
Bangkok Bank (BBL) expects non-performing loans (NPLs) in the small and medium-sized enterprise (SME) segment to peak next quarter after increasing at a slow pace against a backdrop of economic recovery.
Growth in SME NPLs is slowing because of improving economic momentum and the bank's assistance measures, said senior executive vice-president Suvarn Thansathit.
Bad loans for SMEs are expected to peak in the first quarter of 2018 before gradually falling later, he said.
The country's largest lender by assets has no policy to divest distressed loans but will stick to debt restructuring through several methods, including offering grace periods for both principle and interest, rescheduling the loan payment period, interest rate cuts and giving additional credit lines to help customers, said Mr Suvarn.
"We are monitoring the farm and rice mill sectors, affected by a drop in agricultural prices," he said. "Some of them have taken a heavy blow and the bank needs to take care of them."
SME operators are the most vulnerable to economic misfortunes and the segment contributes a large share of NPLs relative to other sectors.
Bad SME loans rose to 4.63% of outstanding loans at the end of September from 4.42% at the end of June, according to the Bank of Thailand's data.
BBL's SME customers have already used5 billion baht in credit guarantees provided by the Thai Credit Guarantee Corporation under the portfolio guarantee scheme (PGS) 6. The bank expects to achieve its 12-billion-baht quota by the middle of next year, said Mr Suvarn.
Another senior executive vice-president, Virasak Suthanthavibul, said BBL expects to achieve its SME loan growth target in a range of 3-5% this year. Loan demand for the business segment has been improving in the second half of this year, mainly supported by better economic signs.
BBL shares closed yesterday on the Stock Exchange of Thailand at 204 baht, unchanged, in trade worth 418 million baht.