Economic doldrums cause BAAC loans to decrease

Economic doldrums cause BAAC loans to decrease

Farmers queue for aid at the BAAC's Samut Prakan branch. (Photo: Somchai Poomlard)
Farmers queue for aid at the BAAC's Samut Prakan branch. (Photo: Somchai Poomlard)

Loans from the Bank for Agriculture and Agricultural Cooperatives (BAAC) in the first quarter of its accounting year expanded at a lower rate than the same period the previous year, attributed to a slowing economy, says president Tanaratt Ngamvalairatt.

BAAC's accounting year begins April 1 and ends on March 31.

The bank lent 1.16 billion baht from April to June 2021, down 30% year-on-year.

The bank's best-case scenario for non-performing loans (NPLs) this year is a rise to 4%, but they could reach 5% in the worst case.

The bank's NPLs as of June this year stood at 3.86% of total outstanding loans of 1.55 trillion baht.

BAAC expects its loans this year to exceed the 69 billion baht it posted last year, but the reaching that target depends on economic growth.

Some economists forecast a range of outcomes, from a contraction of 1% to zero growth.

The Finance Ministry predicted average economic growth of 1.3% this year, according to its latest forecast.

Mr Tanaratt said this year the bank is focusing on loan quality rather than loan expansion, in line with the impact of the outbreak on the bank's revenue.

BAAC has offered debt relief to clients by suspending their principal and interest payments.

The bank granted a suspension of one year on debt repayment for customers who are required to service debt on an annual basis, and a six-month suspension for those who repay debt on a monthly instalment basis.

Do you like the content of this article?
COMMENT (1)

Indonesia to lift palm oil export ban from Monday

JAKARTA: Indonesia will lift its palm oil export ban from Monday, May 23, following improvements in the domestic cooking oil supply situation, President Joko Widodo said on Thursday.

18:46

North Korea 'ready for nuclear test' with Biden due in Seoul

SEOUL: North Korea is poised to conduct a nuclear test, Seoul said Thursday, as the United States warned it could come as President Joe Biden visits South Korea this week.

18:45

Singapore Air says business travel is climbing its way back

Business travel is returning for Singapore Airlines Ltd, with forward bookings accounting for a similar proportion of ticket sales as before the Covid pandemic now that border restrictions have been lifted.

18:09