Exim Bank sees NPLs increase from 2019
Export contraction projected at 8-10%
published : 23 Jul 2020 at 04:03
newspaper section: Business
writer: Wichit Chantanusornsiri
Bad loans at the Export-Import Bank of Thailand (Exim Bank) rose by almost two percentage points in the first half from year-end 2019 as Thai exports have been reeling from the pandemic.
The bank's non-performing loans (NPLs) stood at 6.37% of total outstanding loans in June, a surge from 4.6% logged at year-end 2019.
Exim Bank's NPL ratio is expected to remain at this rate or edge up in the coming period, said president Pisit Serewiwattana.
Full-year Thai exports are expected to contract by 8-10%, higher than the 5-8% projected previously, said Mr Pisit.
The Commerce Ministry admitted for the first time the country's exports may shrink by more than 5% for the year after performance plunged 22.5% year-on-year in May, leading figures for the first five months to drop by 3.71% from the same period last year.
"Our exports are poor, but not worse than other countries. Some people think the impact [from the pandemic] is similar to a world war, rippling across the globe and causing Thailand's economic growth rate to fall by 6-8% this year," he said.
"Some countries such as Singapore logged a 41% quarter-on-quarter contraction [in the second quarter].
"If anyone fails to adjust to this condition, they will ultimately have to close their business. But if companies can adjust, they may be injured but can still sustain their businesses."
Under this new context, entrepreneurs must incorporate technology to add value and reduce the cost of products, as well as develop new market channels both via the online and direct sales platforms, said Mr Pisit.
Exim Bank registered a profit before provisions of 1.16 billion baht in the first half.
After setting aside a provision under the Thai Financial Accounting Standards 9 and a loan-loss reserve worth a combined 5.48 billion baht, the bank logged a net loss of 1.4 billion baht for the first six months.
The bank set up a reserve for expected credit losses at a high coverage ratio of 164%.
- billion baht
- coverage ratio
- credit losses