Banks focus on vulnerable amid uneven recovery

Banks focus on vulnerable amid uneven recovery

Local banks have continued to support vulnerable customers amid the uneven economic recovery and the upward trend of non-performing loans (NPLs).

Kattiya Indaravijaya, chief executive of Kasikornbank (KBank), said its bad debt has increased, especially among groups of vulnerable customers.

She added that such an increase is not significant and is manageable.

KBank has several solutions in terms of bad debt management, including the sale of NPLs to asset management companies.

She said that even though the economy has been picking up, the recovery is on a gradual and uneven basis.

With this scenario, some customers have yet to benefit from the economic rebound and the bank would continue to support them through debt restructuring programmes.

KBank, the country's second largest lender by total assets, and JMT Networks Services have jointly set up JK Asset Management (JK AMC) to manage distressed debt by focusing mainly on unsecured NPLs.

JK AMC was established under the Bank of Thailand's new licence for joint-venture AMCs.

The licensing aims to handle the rising NPLs after the Covid-19 pandemic.

Ms Kattiya said JMT is an expert on unsecured-bad debt management and the cooperation would help KBank better manage the bad debt.

KBank expects to keep the NPL ratio as targeted by the end of this year. The bank has set the gross NPL ratio for 2022 in the range of 3.7-4%, a marginal increase from last year's target of 3.76%.

According to the Bank of Thailand, the NPLs of the commercial banking sector as of June this year stood at 2.88% of total loans, down from 2.93% at the end of March as a result of debt restructuring and banks' loan management.

While the central bank forecasts that NPLs would gradually rise, in accordance with economic situation, the Bank of Thailand does not expect a severe NPL situation, thanks to the banks' relief measures available to the customers.

Payong Srivanich, president of Krungthai Bank (KTB), said banks would continue to assist vulnerable customers in all segments through their long-term debt restructuring schemes amid the uneven economic recovery and the upward trend of the interest rate.

Mr Payong, who also serves as chairman of the Thai Bankers' Association, added that KTB will encourage customers, who show signs of waning ability on debt repayment, to participate in its long-term debt restructuring programmes.

Given its debt assistance measure, KTB has maintained its NPLs at a steady level.

He added that the overall banking industry and KTB have solid capital bases, which enable them to keep supporting vulnerable groups of customers.

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