Non-Performing Loans increase in first quarter

The Thai central bank reports a sizable increase in the country’s non-performing loans during the first quarter of this year. However, it was only to be expected due to a probable slowdown in the economy.

The Bank of Thailand said today that the country’s NPLs have risen 11.86 billion baht or 2.5 per cent from the last quarter of 2007, to 469.46 billion baht as of March 30, 2008.

The BoT said that higher bad debts were contributed by significant increases in both new and re-entry non-performing loans, which reflect a likely slowdown in local economic conditions.

Among all sectors that registered higher NPLs, the industrial group recorded the biggest amount, 5.06 billion baht. It is followed by personal and consumption loans, commercial loans, and that granted to the service sector.

Thai Bankers Association Secretary-General Tawatchai Yongkittikul says that as local banks prepare to raise interest rates, after the central bank upped its benchmark rate by 25 basis points on Wednesday, consumers will likely shoulder more burdens and that could result in a slight increase in NPLs soon. (TOC)

This is for Q1. With the running inflation (leading to a decline of purchasing power)… it’s almost a certainty : the NPL for personal and consumption will increase.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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