State-owned GH Bank expects loans worth 4.5 billion baht to turn into non-performing loans (NPLs) in January from 9 billion baht in loans borrowed by debtors classified as having fragile debt-servicing ability.
Only 50% of debtors clustered in a group with fragile debt-servicing ability are expected to repay their debts, said president Chatchai Sirilai.
The bank's debt moratorium programme will end on Jan 30, 2021.
The total amount of loans in GH Bank's debt moratorium programme is registered at 90 billion baht. Of this amount, 9 billion baht are loans taken out by the fragile debtor group.
This group is considered as having the most NPL exposure, said Mr Chatchai.
The bank is preparing to set aside loan loss reserves worth 5 billion baht to safeguard against potential bad loans of 4.5 billion baht.
GH Bank will also contact every customer in the fragile debtor group to follow up on their debt-servicing ability, he said.
The bank's NPL ratio stood at 3.68% of total outstanding loans or around 46 billion baht in October. The value of NPLs rose by around 2.6 billion baht in November, partly attributed to new loan delinquencies.
Debtors were unable to service their debts worth a combined 9 billion baht for the first slot of debt repayments that ended in September.
Their debt-servicing ability improved in October as 87% of debtors were able to repay their loans, while 8.7% managed to make partial repayments and 4.5% could not service their debts, said Mr Chatchai.
GH Bank issued new loans worth 19 billion baht in November and expects new loan issuance to tally at 23 billion baht in December, he said.