NPLs dropped slightly to Bt402.11 billion in June from Bt416.1 billion in March.
Bandid Nijathaworn, a deputy Bank of Thailand governor, said yesterday that NPLs did not become a bigger problem despite the economic downsizing in the first half because commercial banks had taken care of customers in the first place. “It shows that banks have assigned importance to their cusฌtomers since the beginning of the economic slowdown,” he said. The central bank has reported that from March to June, NPLs of local banks declined markedly from Bt404.6 billion or 5.86 per cent to Bt388.63 billion or 5.74 per cent of total loans. However, at foreign full branches, NPLs surged from Bt11.49 billion or 1.67 per cent to Bt13.48 billion or 1.89 per cent over the same period. Total loans of Bt5.9 trillion in June were down 3.28 per cent from the end of last year, while SME loans sank at a faster pace of 8 per cent from last December to Bt2.3 trilฌlion.
Assistant governor Sorasit Soontornkes said the declines in loans were caused by the economic slowdown and tighter bank loan approvals. Loan demand congealed as SMEs saw their foreign orders drop about 20-50 per cent, and corporations turned to raising capital in the bond market, he said. Seven SME associations met with the central to discuss bank lending, the strong baht and other obstacles to business. They wanted the banks to provide working capital to SMEs by relaxing lending conditions for SMEs since their businesses are in trouble, and speeding up the lending process.