Thailand’s top three banks have combined non-performing loans (NPLs)of more than US$9.6 billion, the highest in Southeast Asia, but Thai banksoverall still have a high level of reserves for bad debts, says the Federationof Thai Capital Market Organizations (Fetco).
Fetco recently released its Capital Market Snapshot report entitled”Aspects in Stability of the Banking Industry in Asean”, revealinginformation about debt, deposit and loan risks in the commercial bankingsector in Thailand and other Asean countries.
According to the report, Singapore has the highest proportion of accounts receivable and deposits from customers (non-financial institutions)compared with GDP, at 228% and 287%, respectively. Thailand, Vietnamand Malaysia have similar proportions of accounts receivable and depositscompared with their respective countries’ GDPs, while the Philippines hasthe lowest such figures at 56.4% and 85.4%, respectively.
Thailand has the highest value of bank deposits among six Asean countriesat $55.4 billion, accounting for 17% of GDP. Meanwhile, the total value ofNPLs for the top three Thai banks exceeded $9.6 billion, or 1.69% of totaldebts in the country, Fetco said.
In the Philippines, the total NPLs of the top three banks is more than $2.5billion, accounting for 1.23% of total debts, while the sum for the threelargest banks in Indonesia exceeds $4.6 billion, accounting for 1.21% ofthe total debts there.
“The level of bad debt for Thai banks is 4% of the total debt, but there is aconsistently high level of provision for bad debts,” noted the report. The proportion of short-term deposit accounts (less than one year) inThailand has been on an upward trend since 2017. Singapore has the lowest economic risks, while its banking sector has themost lending and deposits from customers in the region when comparedwith GDP. Malaysia has the largest number of banks operating in Asean at 311, whileThailand has the smallest number at only 58.
By Nuntawun Polkuamdee. 30 June 2023.
Source: Bangkok Post. https://www.bangkokpost.com/business/2602366/thai-banks-top-asean-bad-debt-rankings. 8 July 2023.
Scroll To Top