Thailand's top three banks have combined non-performing loans (NPLs) of more than US$9.6 billion, the highest in Southeast Asia, but Thai banks overall still have a high level of reserves for bad debts, says the Federation of Thai Capital Market Organizations (Fetco).
Fetco recently released its Capital Market Snapshot report entitled "Aspects in Stability of the Banking Industry in Asean", revealing information about debt, deposit and loan risks in the commercial banking sector in Thailand and other Asean countries.
According to the report, Singapore has the highest proportion of accounts receivable and deposits from customers (non-financial institutions) compared with GDP, at 228% and 287%, respectively. Thailand, Vietnam and Malaysia have similar proportions of accounts receivable and deposits compared with their respective countries' GDPs, while the Philippines has the lowest such figures at 56.4% and 85.4%, respectively.
Thailand has the highest value of bank deposits among six Asean countries at $55.4 billion, accounting for 17% of GDP. Meanwhile, the total value of NPLs for the top three Thai banks exceeded $9.6 billion, or 1.69% of total debts in the country, Fetco said.
In the Philippines, the total NPLs of the top three banks is more than $2.5 billion, accounting for 1.23% of total debts, while the sum for the three largest banks in Indonesia exceeds $4.6 billion, accounting for 1.21% of the total debts there.
"The level of bad debt for Thai banks is 4% of the total debt, but there is a consistently high level of provision for bad debts," noted the report.
The proportion of short-term deposit accounts (less than one year) in Thailand has been on an upward trend since 2017.
Singapore has the lowest economic risks, while its banking sector has the most lending and deposits from customers in the region when compared with GDP.
Malaysia has the largest number of banks operating in Asean at 311, while Thailand has the smallest number at only 58.
Short-term deposits in the Philippines make up about 60% of its bank accounts, but the country has the lowest debt-to-deposit ratio among six Asean countries.