Siam Commercial Bank (SCB) has prepared long-term debt restructuring for customers to help them survive the prolonged Covid-19 pandemic, in line with the central bank's requirement.
SCB expects applicants for debt relief measures in 2022 to have 500 billion baht in debt outstanding, up from the 464 billion recorded in the third quarter of 2021, said chief financial officer Manop Sangiambut.
He said some customers who exited the debt relief programme were expected to return to ask for financial aid because of the continued outbreak, including the Omicron variant.
According to its financial statement filed with the Stock Exchange of Thailand last November, SCB has provided 839 billion baht in relief loans to more than 1.2 million customers since the second quarter of 2020.
In the third quarter of 2021, SCB's overall relief loans rose to 464 billion baht, representing 20% of its total loans, up from 16% in the previous quarter.
This followed the Bank of Thailand's launch of a two-month debt moratorium measure to help small and medium-sized enterprises and retail customers in dark red zones.
The 464 billion baht includes 124 billion SCB provided under the two-month debt holiday that expired at the end of last year.
Of the 464 billion baht in relief loans, 80-100 billion was debt aid for hotels and tourism-related businesses.
Some hotel operators chose to apply for the central bank's asset warehousing scheme, said Mr Manop.
He said in 2022 SCB would focus mainly on offering long-term debt restructuring to hoteliers.
SCB, the country's fourth largest bank by total assets, already started moving clients in its short-term debt restructuring programme to the long-term one, said Mr Manop.
The long-term debt restructuring portfolio is expected to increase in 2022.
Under the long-term debt restructure, SCB would pay attention to extending debt instalment periods for customers with an interest rate cut as an additional option, he said.
Mr Manop said the bank would set loan-loss reserves in line with asset quality in 2022.
The initial existing provision for loan loss and a coverage ratio for non-performing loans (NPLs) of 138% is expected to be sufficient to handle business operations in 2022, he said.
The bank's NPL ratio was 3.9% in the third quarter of 2021 and it was expected to maintain this level as of the year-end, which is lower than the bank's projection of 4-4.5%, said Mr Manop.