The National Credit Bureau (NCB) reported a 39% increase in bad debt for pickup truck loans in May.
Meanwhile, banks recorded a contraction in car loans for the first half of this year, reflecting a decline in car sales nationwide.
As of May 2024, non-performing loans (NPLs) for pickup trucks amounted to around 138 billion baht, a 39.1% increase year-on-year. Troubled debt restructuring for the auto loan segment reached 24.1 billion baht, rising 16% from the same period a year before, according to NCB's credit records.
Special mention loans, defined as those overdue by more than 60 days but not exceeding 90 days for pickups, stood at 137.7 billion baht, a 3.3% increase over the corresponding period last year. However, regular loans for pickups totalled around 753 billion baht, a decline of 10.2%.
Surapol Opasatien, NCB's chief executive, posted on his personal Facebook page that pickup trucks typically serve as an essential livelihood tool for many households nationwide. An urgent solution to household debt, particularly loans related to essential living tools, is therefore required, according to Mr Surapol.
In the meantime, leading banks in the auto loan sector, including Kiatnakin Phatra (KKP), Tisco Bank, TMBThanachart Bank (ttb), and Bank of Ayudhya (Krungsri), reported loan contractions both in the second quarter and the first half of this year.
KKP's hire-purchase outstanding loans stood at 176 billion baht in the second quarter, ending June 30, down by 1.3% quarter-on-quarter and 5.7% year-on-year. Auto loans comprised 44.9% of KKP's total loan portfolio, which stood at 392 billion baht. This coincided with a 23.8% year-on-year drop in domestic new car sales for the first five months of this year, totalling 260,365 units.
Tisco Bank reported a total hire purchase loan portfolio of 103 billion baht for the same period, a decrease of 1.6% quarter-on-quarter and 3.6% year-to-date. Auto loans accounted for 44.1% of Tisco's total outstanding loans, which amounted to 233 billion baht.
According to a statement from ttb to the Stock Exchange of Thailand, ongoing challenges in the car market, including customer demand and price volatility, led to a slowdown in the overall hire purchase portfolio by 3.3% quarter-on-quarter in the second quarter and 4.8% from the first half of last year.
This contraction affected both new and used car segments, in line with ttb's strategy to selectively grow a quality portfolio and tighten underwriting criteria. Auto loans represented 30% of ttb's total outstanding loans.
Meanwhile, Krungsri booked an auto loan portfolio of 415 billion baht in the second quarter, a decline of 2% quarter-on-quarter and 3.4% year-on-year. The bank's outstanding car loans represented 20.8% of Krungsri's total loan portfolio.
The sharp contraction in domestic car sales, coupled with tighter credit conditions and deteriorating debt-servicing capacity of auto-hire purchase customers, mirrored the overall trend of auto loan contraction observed by Krungsri.
