Author Topic: Average Thai household debt reaches 160,000 baht  (Read 820 times)

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Offline thaiga

Average Thai household debt reaches 160,000 baht
« on: November 27, 2013, 01:46:53 PM »
BANGKOK, 27 Nov 2013 (NNT) – The National Statistical Office (NSO) has revealed that the average household debt has risen significantly.

According to a recent NSO survey on social and economic situation of Thai households during the first 6 months of this year, 54.4% of the households were indebted. The survey says that housing loans, daily purchase of commodity products and education expenses accounted for the majority of the household debts currently averaging at 159,492 baht.

Other household debts are related to agriculture and businesses. The survey also says that 91.6% of the debts are done within the formal banking system, 3.8% have deals with both legal and illegal creditors, and 4.6% rely on illegal money lending services. It also indicates that the average household debt made through traditional loan sources is 156,356 baht, which is 50 times higher than that made through illegal lenders.

However when looking at household expenses in each part of the country, the survey shows households in Bangkok and its vicinity have the highest average income of 44,129 baht, with 33,095 baht of average expense, or 75% of the income. The average household debt in these area is at 283,560 baht.

The northeastern region holds the highest expense-to-income ratio at 79.1%, causing households in the zone to have the least savings and the least debt clearing ability. Holding the least expense to income ratio is the households from in the northern region, which stands at 72%.

NNT
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Offline thaiga

Re: Household debt reaches 10 trillion baht for Q2 2014
« Reply #1 on: October 02, 2014, 01:26:36 PM »
BANGKOK, 2 October 2014 (NNT) -

The Bank of Thailand (BOT) has reported that Thailand’s total household debt during the second quarter of this year now stands at 10 trillion baht.

Household debt in Thailand, which makes up 84 percent of the country’s GDP, has increased by 752 billion baht, or 8.11 percent compared to last year's figure.

According to the BOT, the massive rise in household debts could be attributed to an increase in one-month defaults on consumer loans and lower credit quality on car loans and personal loans.

Meanwhile, Kasikorn Bank Executive Vice-President Teeranun Srihong expressed his concerns about the high levels of household debt. He said that personal loans make up 20 percent of the bank’s total loans, whereas the majority of the loans are SME loans.

Mr. Teeranun believes that this year’s loans could grow by 6-7 percent, a bit lower than the 8 percent target.

NNT
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Offline Roger

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Re: Average Thai household debt reaches 160,000 baht
« Reply #2 on: October 02, 2014, 08:33:21 PM »
Wow. Impressive figures.
UK has national debt of GBP 23,333 or nearly GBP 100,000 per family of 4.
And the deficit is running 6% higher this tax year than last so far.
Never mind - we had better not add private debt to those figures I suppose.
 

Offline thaiga

Re: Bad car loans, consumer debt pile up
« Reply #3 on: October 04, 2014, 01:04:56 PM »
Thailand's auto lenders have repossessed three times as many cars as they did a year ago as defaults soar in a flattening economy.

The souring auto loans, accounting for a quarter of consumer borrowing, illustrate the growing debt burden shouldered by Thai households. That is bad news for the military government, which is trying to pull the economy away from the edge as the country's key exports sputter.

With household debt rising to the equivalent of more than 80% of the country's total output, Thai consumers simply do not have deep enough pockets to spend the country out of stagnation.


Consumers browse at the 2014 Motor Show in Nonthaburi this past spring. Buyers who scooped up cars are now having trouble paying for them, with auto lenders repossessing three times as many cars as they did a year ago due to defaults. (Bangkok Post photo)

Leasing firms said bad auto loans had jumped 20-30% this year, and were likely to hit 3% of total loans. Small- and medium-sized banks are the most exposed.

"The worrying sign is that some clients in the provinces have less income than earlier expected," said Sakchai Peechapat, senior executive vice president of Tisco Bank.

The bank's total non-performing loans rose to 2.27% of all lending at end-June from 1.9% at end-March. Auto loans account for the bulk of its lending.

This year, Tisco has seized about 1,000 vehicles a month, compared with an average of 300-400 a month a year earlier, Mr Sakchai said.

"It's challenging for the leasing business. We have not seen a clear sign of recovery yet. It may take longer than previously expected," said Surat Leelataviwat, acting managing director at Kasikorn Leasing Co, a unit of Kasikornbank Pcl.

Kasikorn Leasing's bad loans increased 20% this year, and it rejected more than 10% of loan applications, double the prior year, due to concerns about the high debt burden of borrowers, Mr Surat said.

Non-performing loans in the Thai private consumer sector rose to 2.45% of total loans in the second quarter to a four-year high, from below 2% in late 2011, according to data from the Bank of Thailand.

Curbing earnings

Rising bad debt has hurt earnings growth of car loan providers such as Tisco Bank, Kiatnakin Bank and Thanachart Bank, 49% owned by Bank of Nova Scotia.

Tisco, Kiatnakin and Thanachart are heavily exposed to auto lending, and some analysts have cut their earnings forecasts for the banks to reflect higher bad loan provisions. They are due to report their quarterly earnings in the middle of October.

As banks sell seized cars that they have seized, used car prices have fallen 20-30%, Tisco's Sakchai said, compounding losses for loan providers.

While banks are expecting overall loan growth of 5%-6% this year, auto loan growth has dropped 6%-7% to date and is unlikely to recover for the rest of this year, analysts said. Lenders have become more cautious due to the defaults.

The auto industry, accounting for about 11% of Thai economic output, has been grappling with slow domestic sales since May 2013 when a government subsidy programme for first-time car buyers expired.

August's sales dropped 31% on year, while production declined 27%, prompting analysts and automakers to cut their forecast for car sales to 900,000-950,000 this year. Kasikorn Research expected car sales to rise 16% next year.

"You can see that market is very quiet. The economy is not good. People don't want to buy a new car if they are unsure of future income," said Boonrawd Suadmalai, owner of a second-hand car dealership in Bangkok.

Bangkokpost
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