SME bad loans peak in Q4 of 2020

SME bad loans peak in Q4 of 2020

Non-performing loans (NPLs) of small and medium-sized enterprises (SMEs) peaked in last year's final quarter after businesses endured a big impact from the pandemic, especially those associated with the tourism industry, says the Bank of Thailand.

Gross SME NPLs, classified as stage 3 loans under the Thai Financial Reporting Standards 9 implemented since Jan 1 2020, in the commercial banking sector stood at 6.84% of total outstanding SME loans in last year's final quarter.

The SME bad loan ratio saw an uptick from 6.52% in the third quarter and 6.22% registered at year-end 2019.

The SME loan segment is defined as having a total credit line of no more than 500 million baht per company.

Meanwhile, the gross NPL ratio of large corporates, whose total credit line exceeds 500 million baht each, was recorded at 2.58% of total outstanding corporate loans in the final quarter of 2020, down from 2.61% in the third quarter but considered a surge from 2.08% logged at year-end 2019.

Special-mention loans, classified as overdue loans of no more than 90 days or stage 2 loans, stood at 6.62% of total loans at year-end 2020, down from 7.03% logged in the third quarter but a considerable climb compared to 2.79% in 2019, said Suwannee Jatsadasak, senior director of the regulatory policy department.

Gross NPLs in the commercial banking sector stood at 3.12% of total loans at year-end 2020, a slight drop from 3.14% registered in the third quarter but an increase from 2.98% logged at year-end 2019.

The marginal increase of the gross NPL ratio was mainly attributed to how commercial banks had been providing several instruments for debt relief to ease financial burden shouldered by borrowers, said Ms Suwannee.

At the same time, the central bank has relaxed its NPL classification under the debt restructuring programme amid the pandemic crisis.

"With a slight uptick outlook in the NPL ratio, the central bank is not concerned about overall NPLs managed under commercial banks' debt relief measures. The assistance can be prolonged for borrowers who cannot return to service their debts normally on a case-by-case basis," she said.

In December 2020, there were 8.37 million loan accounts in total that underwent debt relief measures from commercial banks, accounting for total outstanding loans of 4.83 trillion baht.

The value was a decline from a peak of 12.52 million accounts, worth a combined 7.19 trillion baht in July 2020.

Do you like the content of this article?

Boat catches fire at river pier

AYUTTHAYA: A tour boat, which was modified from a cargo barge made of teak wood, caught fire while being moored at a boat pier in Muang district in the small hours on Sunday. There were no casualties.


Most believe information operations waged during election: Nida Poll

Most people believe information operations had been waged by political parties during the lead-up to the May 14 election, both to smear rivals and to win popularity, according to a survey by the National Institute of Development Administration, or Nida Poll.


Angels out to shatter Buriram's dream

Bangkok United and Buriram United are both confident that they will win the FA Cup when they meet in the final on Sunday.