Household NPLs rose by 3.4% from the previous quarter, the National Credit Bureau (NCB) said on Thursday (Nov 21).
Bad debt of small businesses, primarily from commercial loans, amounted to B79.3bn for the quarter, up 5.2% from the previous quarter.
“The significant rise in NPLs among small businesses is a serious concern,” said Surapol Opasatien, the bureau’s chief executive, on his personal Facebook page.
Bureau calculations put the ratio of NPLs to household debt at 8.8% in the third quarter of this year, up from 8.5% in the second quarter.
As of September, total household debt was B13.6trn, covering more than 30mn borrowers across 157 financial institutions.
The Ministry of Finance announced this week that Thai banks’ contributions to the Financial Institutions Development Fund would be halved to 0.23% of deposits for three years.
The move would free up funds that would cover the cost of assistance measures such as a suspension of interest payments for troubled debtors who qualify.
Mr Surapol said household NPLs have been rising since the first quarter of 2023, starting at around B950 billion and increasing to B1.03trn by the second quarter of 2023.
Despite a brief stabilisation between the third and fourth quarters of 2023, attributed to debt restructuring schemes promoted by the Bank of Thailand, bad debt resumed its upward trend in 2024 after the programmes expired.
NPLs rose to B1.09trn in the first quarter, B1.16trn in the second quarter, and around B1.2trn in the third quarter.
Fortunately, growth in NPLs for the four major consumer loan products ‒ housing, autos, credit cards and personal loans ‒ slowed in the third quarter.
Meanwhile, special mention loans, defined as those overdue by more than 60 days but not exceeding 90 days for pickup trucks, showed improvement.
Special mention loans for housing totalled B143bn, up 0.1% increase from the second quarter. Special mention auto loans totalled B201bn, down 4.5%, credit card loans B10.1bn, down 12.8%, and personal loans B79.1bn, up 6.8%.
Mr Surapol said that despite the significant rise in NPLs, debt restructuring, particularly troubled debt restructuring, remained slow in the third quarter.
The value of troubled debts under restructuring was B1.03trn in the third quarter, a 2.9% decline from the previous quarter but a 3.8% increase from a year ago.