Thailand’s banking sector remains resilient in Q3

Thailand’s banking sector stayed strong, with solid capital levels, loan loss provisions, and liquidity, despite a slowdown in loan growth and an increase in bad debts throughout the third quarter of the year.

The Bank of Thailand reported on Tuesday that loan growth in the country’s banking system dropped to 2 per cent year-on-year in July-September, mainly due to higher debt repayments by the government and large corporations.

The central bank also noted that new lending to large corporations in the service, real estate, and trade sectors continued, along with personal and mortgage loans. However, the overall pace of expansion slowed.

Gross non-performing loans (NPLs) rose to 553.4 billion baht ($15.96 billion) in the third quarter, resulting in an NPL ratio of 2.97 per cent. This increase was driven by a shrinking loan base and higher NPLs in business and consumer loans.

Despite a decline in quarterly net profits, the banking sector’s profitability improved year-over-year, primarily due to gains from financial instruments measured at fair value through profit or loss.

Attribution: Xinhua

Subediting: Y.Yasser