Household non-performing loans (NPLs) reached 1.2 trillion baht in the third quarter of this year, marking a 14% increase compared to the same period last year. Additionally, there are growing concerns about the rising bad debts among small businesses, which have surged by 20%.
According to the National Credit Bureau (NCB), household NPLs increased by 3.4% from the previous quarter.
The bad debt in small businesses, primarily linked to commercial loans, totaled 79.3 billion baht for the quarter, reflecting a 5.2% rise from the previous quarter.
Surapol Opasatien, the bureau’s chief executive, expressed his concerns regarding the significant increase in NPLs among small businesses on his personal Facebook page.
The NCB’s calculations indicate that the ratio of NPLs to household debt was 8.8% in the third quarter, up from 8.5% in the second quarter.
As of September, total household debt stood at 13.6 trillion baht, with over 30 million borrowers across 157 financial institutions.
This week, the Ministry of Finance announced that Thai banks’ contributions to the Financial Institutions Development Fund would be reduced by half to 0.23% of deposits for three years. This adjustment will free up funds to support assistance measures, including the suspension of interest payments for qualifying troubled debtors.
Mr. Surapol noted that household NPLs have been on an upward trend since the first quarter of 2023, starting at approximately 950 billion baht and rising to 1.03 trillion by the second quarter of 2023.
Although there was a temporary stabilization between the third and fourth quarters of 2023, due to debt restructuring initiatives promoted by the Bank of Thailand, bad debts resumed their increase in 2024 after these programs ended.
NPLs rose to 1.09 trillion baht in the first quarter, 1.16 trillion in the second quarter, and around 1.2 trillion in the third quarter.
Fortunately, the growth in NPLs across the four major consumer loan categories—housing, automobiles, credit cards, and personal loans—slowed in the third quarter.
Meanwhile, special mention loans, categorized as those overdue for more than 60 days but not exceeding 90 days for pickup trucks, showed some improvement.
Special mention loans for housing amounted to 143 billion baht, reflecting a slight increase of 0.1% from the second quarter. In contrast, special mention auto loans totaled 201 billion baht, down by 4.5%; credit card loans stood at 10.1 billion baht, a decrease of 12.8%; and personal loans reached 79.1 billion baht, with a rise of 6.8%.
Despite the notable increase in NPLs, Mr. Surapol stated that the pace of debt restructuring, particularly for troubled debts, remained slow in the third quarter. The value of troubled debts undergoing restructuring was 1.03 trillion baht in the third quarter, representing a 2.9% decline from the previous quarter, but a 3.8% increase from a year earlier.
