Thai banks’ non-performing loans (NPLs) dropped to 2.78% of outstanding loans at the end of December 2024 from 2.97% at the end of September, the Bank of Thailand said on Tuesday.
The decrease reflected careful loan portfolio management, ongoing debt assistance and the reclassification of certain NPL debtors, the Bank of Thailand said in a statement.
The banking sector remains resilient with robust levels of capital, loan loss provisions, and liquidity, it said.
Bank lending fell 0.4% in the fourth quarter of 2024 from a year earlier, after a fall of 2% in the previous quarter, reflecting growing risk aversion and a sluggish economy. NPLs totalled 552 billion baht.
Lending to large businesses expanded while loans for smaller businesses contracted at a slower pace, the central bank said.
“Consumer loans continued to decline, particularly auto loans, which were affected by structural issues and slow income recovery among vulnerable segments,” it said.
In 2024, domestic car sales fell 26.2% to the lowest in 15 years as banks issued fewer car loans amid high levels of household debt.
The ratio of household debt to gross domestic product is estimated to have dropped slightly from 89% at the end of September, central bank assistant governor Suwannee Jatsadasak told a press conference. The ratio is among the highest in Asia.
The government has been urging banks to increase credit access amid sluggish growth. The economy expanded 2.5% last year, lagging peers again, with fourth-quarter GDP growth below expectations.
Earlier on Tuesday, Prime Minister Paetongtarn Shinawatra said the government and central bank must work together to support smaller businesses as the government pushes for 3.5% growth this year.