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Published on March 24, 2008

From the third quarter to the fourth quarter, Bt12.4 billion of loans were added to consumer NPLs, second only to manufacturing NPLs, which rose by Bt22.6 billion. NPLs in the commerce sector recorded the third highest increase with Bt11.3 billion.

The picture for consumer loans has gradually become murky since the third quarter when they had the third highest growth in the first half. The fourth-quarter increase, however, was slower than the previous quarter.

The additions to NPLs reflect troubles by borrowers in servicing their debts amid the political uncertainty, sluggish economy and a fragile state of recovery of private consumption and investment.

Earlier, the Monetary Policy Committee expressed concern over the repayment ability of low-income debtors and marked the issue to be closely monitored.

However, gross consumer NPLs dropped from 4.74 per cent of total loans in the third quarter to 4.06 per cent, or Bt58.2 billion, in the fourth quarter. They ranked the eighth largest among 11 groups of NPLs.

According to the Bank of Thailand, new consumer NPLs increased by Bt9.3 billion in the fourth quarter, second to manufacturing with Bt12.7 billion. The figure has apparently increased since the third quarter.

Re-entry consumer NPLs rose by Bt2.3 billion in the fourth quarter, third after manufacturing with Bt5 billion and commerce with Bt2.7 billion.

The reduction in NPLs in the fourth quarter was Bt15 billion, compared with Bt11.9 billion in the third quarter.

The decline in NPLs stemmed from the successful debt restructuring of Bt4.1 billion, compared with Bt2.9 billion in the third quarter. The remaining reduction of Bt10.8 billion in NPLs was due to other reasons, compared with Bt9 billion in the previous quarter.

In the fourth quarter, the increase in NPLs in the banking system was Bt67.7 billion in the fourth quarter, compared with an increase of Bt77.4 billion in the previous quarter. Yet, the reduction in NPLs in the period was Bt95.3 billion, leaving a net Bt454.7 billion in NPLs or 7.31 per cent of outstanding credit.

New NPLs rose by Bt41.8 billion, compared with Bt49.7 billion in the third quarter. Re-entry NPLs surged by Bt9.4 billion, down from Bt19 billion in the third quarter.

NPLs of foreign banks' branches and finance companies grew at an accelerating pace, while those of local commercial banks declined from the previous quarter.

Anoma Srisukkasem

The Nation