SME bad debts peak in Q4 2020
Small and medium-sized enterprises (SMEs) non-performing loans (NPLs) peaked in the last quarter of last year after businesses suffered a significant impact from the pandemic, especially those associated with the tourism industry, according to the Bank of Thailand.
Gross non-performing loans of SMEs, classified as Stage 3 loans under Thai Financial Reporting Standards 9 implemented since January 1, 2020, in the commercial banking sector amounted to 6.84% of total outstanding loans. loans to SMEs in the last quarter of last year.
The bad debt ratio of SMEs increased slightly, from 6.52% in the third quarter and from 6.22% recorded at the end of 2019.
The SME loan segment is defined as having a total line of credit not exceeding 500 million Baht per business.
At the same time, the gross NPL ratio of large companies, whose total credit line exceeds 500 million baht each, was recorded at 2.58% of total outstanding business loans in the last quarter of 2020, compared to 2 , 61% in the third quarter but considered an increase from 2.08% recorded at the end of 2019.
Special mention loans, classified as loans past due for up to 90 days or stage 2 loans, represented 6.62% of total loans at the end of 2020, compared to 7.03% recorded in the third quarter but up considerably compared to at 2.79%. in 2019, said Suwannee Jatsadasak, senior director of the regulatory policy department.
Gross non-performing loans from the commercial banking sector stood at 3.12% of total loans at the end of 2020, a slight decrease from 3.14% recorded in the third quarter, but an increase from 2.98% recorded at the end of 2019.
The marginal increase in the gross NPL ratio was mainly attributed to the way in which commercial banks provided several debt relief instruments in order to alleviate the financial burden on borrowers, Ms. Suwannee said.
At the same time, the central bank relaxed its classification of NPLs as part of the debt restructuring program amid the pandemic crisis.
“With the prospect of a slight increase in the NPL ratio, the central bank is not concerned about the aggregate NPLs managed as part of the commercial bank debt relief measures. The assistance can be extended for borrowers who cannot resume service of their debts normally on a case-by-case basis. case by case, ”she said.
As of December 2020, there were 8.37 million loan accounts in total that were subject to debt relief measures from commercial banks, representing a total outstanding amount of 4.83 trillion baht.
The value was down from a peak of 12.52 million accounts, with a combined value of 7.19 trillion baht in July 2020.
