Bankers seek further relief as outbreak hits borrowers

Bankers seek further relief as outbreak hits borrowers

Easing of loan-loss set-asides on agenda

The Thai Bankers' Association (TBA) is set to ask the central bank for a further easing of requirements for loan-loss provisions after banks offered relief measures to customers affected by the coronavirus crisis.

"The TBA will discuss additional measures and regulatory barriers, including additional relaxation of loan-loss provisions, with the Bank of Thailand," said TBA chairman Predee Daochai.

At Wednesday's TBA meeting, members extensively discussed the additional assistance measures for tourism and related businesses battered by the virus outbreak.

The participants agreed that blanket measures for all banks are unnecessary and each bank should individually provide assistance to customers because their problems vary case by case, Mr Predee said.

Banks' combined loan portfolio for the tourism sector totals 600 billion baht, he said. Most borrowers are in key destinations like Pattaya, Chiang Mai and Phuket.

Some tourism debtors are asking for refinancing, said Mr Predee, also a co-president of Kasikornbank (KBank).

Kasikorn Research Center is in the process of compiling its 2020 economic outlook in accordance with the National Economic and Social Development Council's revisions, but the bank's own targets remain in place.

"It's too early to adjust business targets for this year," Mr Predee said. "We will continue to do business and adjust strategies in line with the current situation. Normally the bank reviews business targets in the second half."

KBank, the country's largest lender by assets, aims for 2020 loan growth of 4-6%, with net interest margin of 3.1-3.3%.

Siam Commercial Bank co-president Sarut Ruttanaporn said SCB plans to review its business targets in March, as opposed to mid-year under normal practice.

The proactive adjustment this year is based on several uncertainties and their effect on the overall economy.

The SCB Economic Intelligence Center has revised down its GDP growth projection for this year to 1.8% from an earlier 2.1% forecast.

"The loan growth target review for this year is likely to align with the lower GDP growth forecast," Mr Sarut said. "The bank will also reconsider other financial targets after several debt restructuring measures were implemented to help customers amid the difficult situation."

SCB, the country's fourth-biggest bank by assets, set a loan growth target of 3-5%, with net interest margin of 3.2-3.4%.

Bangkok Bank executive chairman Deja Tulananda said his bank plans to review the economic situation, its effects on customers and the business plan in the second quarter.

The bank's lending has continued to grow since the start of the year, but NPLs are also ticking up as economic activity is dampened by the coronavirus outbreak.

The country's second-largest bank set a 2020 loan growth target of 3-4%. It expects to set aside loan-loss reserves of 12-15 billion baht this year, down sharply from last year's 32 billion baht.

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