Author Topic: Banks viruscrisis  (Read 3302 times)

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: viruscrisis - Household debt has risen to alarming levels
« Reply #60 on: September 30, 2020, 10:48:49 AM »
Household debt has risen to alarming levels over past decade, BOT study finds
Thai household debt rose to 80.1 per cent of gross domestic product in the first quarter of this year, up from 50.4 per cent in 2009, according to a study.

The high debt has adversely impacted economic growth while the Covid-19 outbreak has made it more challenging to solve the household debt problem and they have the potential to delay economic recovery, said the study by researchers at Bank of Thailand (BOT)’s Puey Ungphakorn Institute for Economic Research.

Over the past 10 years, more people are bearing a debt burden and the size of the debt has increased from Bt70,000 to Bt128,000 each (median value), according to the study released at BOT Symposium 2020 on Monday.

The share of bad debt/non-performing loans has decreased from 22 per cent to 16 per cent, which is considered still high. The median value of bad debt was Bt 65,000, up from Bt35,000 previously.

The study also found it astonishing that debtors who had started borrowing money at a young age continued to bear the burden even after retirement.

About 60 per cent of people aged 29 to 30 years old have debt. Among them, 25 per cent were in the bad-debt category. Pensioners still have debt, with median value of Bt70,000 to Bt80,000 per debtor.

Researchers believe the first-car scheme launched in 2011 was a major factor in the rising debt of urban residents. Farm subsidies, such as debt moratorium to support farmers also resulted in rising debt among people upcountry.

This suggested that a moratorium could not solve the debt issue.

The Covid-19 outbreak has worsened the situation and many are unable to service their debt.

Of the large number of people who had applied for financial aid under the central bank’s scheme between April and June, 71 per cent asked for temporary suspension of debt payment, 26 per cent demanded reduction of debt instalments and 3 per cent applied for debt restructuring as they were no longer able to repay the debt.

Those who applied for debt relief were concentrated in the lower-northeastern region covering Nakhon Ratchasima, Buri Ram, Surin, Si Sa Ket and Ubon Ratchathani provinces. About 40 to 60 per cent of applicants were personal loan borrowers followed by mortgages, while most of those in Bangkok and vicinity provinces, the South and upper North applied for restructuring of their bad debts or non-performing loans (NPLs).

Non-bank lenders represent a large share of debtors asking for debt relief. Most of the debts are hire-purchase loans. Should the coronavirus linger on, non-bank lenders would have high risk stemming from debt default, the researchers said. Each has debt of about Bt500,000.

In July when some financial aid expired, the study found that 2.1 million debtors exited the scheme, and they represented about 36.7 per cent of total debtors who received debt relief.

The study called for urgent actions to solve the rising household debt.

One proposal is to amend the bankruptcy law that will allow debtors to file for court protection and then they can start their lives anew after three years of the debt payment process, in the same manner as corporates currently applying for bankruptcy protection.

Reopening the country to foreign tourists would also boost economic activities, which could help many debtors as rising income would increase their debt payment capacity, the study said. But it will come with the risk of a new wave of virus infections, so the reopening for tourism must be managed carefully, the study said.

Concerned parties may need to apply different solutions for debtors in different regions, the study suggested.

The study is based on information collected from the National Credit Bureau Co, whose data base covers 23.1 million retail borrowers with combined debt of Bt 11.9 trillion, representing 88.3 per cent of the total household debt, and data from Bank for Agriculture and Agricultural Cooperatives.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: Banks viruscrisis - Thai commercial banks stand strong despite crisis
« Reply #61 on: October 01, 2020, 11:02:57 AM »
Thai commercial banks stand strong despite crisis: DPA
The Deposit Protection Agency (DPA) has said the state of commercial banks in Thailand is not that bad judging by the fact that their capital adequacy ratio is averaging at 19.2 per cent – a lot higher than the 8.5 per cent specified by the central bank.

DPA director Songpol Chevapanyaroj said the profit of each commercial bank in the second quarter of 2020 stood at around Bt30 billion, down from Bt60 billion earned in the second quarter of 2019.

However, he said, this was not a problem because Thailand’s financial institutions have adapted to the current situation, unlike what happened during the 1998 Tom Yum Kung crisis.

The director added that his organisation has earmarked Bt129 billion to support commercial banks in case of bankruptcy.

Despite the Covid-19 crisis, Songpol said financial institutions in Thailand have grown, with total bank deposits rising by 6 per cent in late March and 8 per cent in the first half of 2020.

Total bank deposits this year are expected to show a growth of around 4 to 6 per cent from last year. DPA forecasts that the economy this year will contract by 8.5 to 9 per cent, similar to the Finance Ministry’s estimates.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: viruscrisis - Fitch warns of steep path without tourists
« Reply #62 on: October 10, 2020, 07:59:42 PM »
Fitch warns of steep path without tourists

Thailand's economy will face a daunting recovery trajectory if tourism does not improve, as economic growth is tied directly and indirectly to foreign tourist arrivals, says Fitch Ratings.

"I think it is very hard to see Thailand mounting an aggressive recovery in [economic] growth in the absence of some kind of improvement in the tourism sector," said James McCormack, global head of sovereign and supranational ratings at Fitch.

full article bangkokpost.com
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: Banks viruscrisis - Thai economic outlook highly uncertain
« Reply #63 on: October 14, 2020, 03:30:50 PM »
Thai economic outlook highly uncertain, risks tilted to downside -c.bank
(Reuters) - Thailand’s economic outlook remains highly uncertain with risks tilted to the downside and the central bank stands ready to use necessary tools to support an economy hammered by the coronavirus pandemic, central bank officials said on Wednesday.

Southeast Asia’s second-largest economy contracted the most in 22 years in the second quarter, with tourism hit hard.

An economic recovery will take at least two years to return to pre-pandemic levels and will be “uneven”, the Bank of Thailand (BOT) said in a statement at an analysts’ meeting.

“We have to wait until the second half of 2022 to see economic activity back to pre-COVID levels, but there are still many downside risks,” senior director Don Nakornthab said, adding reopening to foreign tourists would be key.

The BOT expects 6.7 million foreign tourists this year and 9 million in 2021. Last year’s 39.8 million visitors accounted for 11.4% of GDP.

Thailand’s plans to receive visitors again have been delayed.

The BOT expects the economy to contract by a record 7.8% this year before growing 3.6% next year.

The central bank reiterated a need to preserve limited policy room for the most effective time and said is ready to use appropriate policy tools as necessary.

The policy rate is at a record low of 0.50% after three cuts this year. Most analysts see no further easing this year.

More targeted fiscal measures will be needed to support the recovery, Deputy Governor Mathee Supapongse said, adding that BOT will soon announce measures on soft loans and expiring debt.

The BOT will also ease rules on foreign currency deposits (FCDs) early next year and for Thais to directly invest overseas to balance fund flows.

“Timing will be quick... but it will not be done at once. The first phase should be for FCDs with fewer conditions,” Mathee said.

reuters.com
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: viruscrisis - Thai economy faces severe shocks, slow recovery
« Reply #64 on: October 20, 2020, 11:17:41 AM »
Thai economy faces severe shocks, slow recovery -c.bank chief
(Reuters) - Thailand’s economy faces severe shocks from the coronavirus pandemic and a recovery is expected to take at least two years to get back to pre-pandemic levels, the country’s new central bank governor said on Tuesday.

Economic problems can be solved but it will take time as there are “no magic bullets”, Bank of Thailand Governor Sethaput Suthiwartnarueput told a briefing.

The country had a strong external position to withstand any shocks, said Sethaput, who took office this month.

Southeast Asia’s second-largest economy could contract a record 7.8% this year, with the important tourism sector badly hit, the central bank has predicted.

reuters.com
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: viruscrisis - Finance Minister Arkhom gives economic update
« Reply #65 on: October 21, 2020, 04:27:53 PM »
Finance Minister Arkhom gives economic update
(NNT) - The Finance Minister, Arkhom Termpittayapaisith, says Thailand’s economic outlook has been upgraded to a 7.1 percent contraction, from a 7.7 percent decline, thanks to the government’s measures to support the business sector. As the soft loan scheme ends on October 22, the government will continue implementing measures to boost liquidity, and the issue will be clear early next week.


Mr. Arkhom said after the cabinet meeting yesterday that Deputy Prime Minister and Energy Minister, Supattanapong Punmeechaow, had presented a report on the country’s economic outlook from the International Monetary Fund’s (IMF) database. Thailand’s gross domestic product (GDP) growth has been revised to a contraction of 7.1 percent this year, up from a negative 7.7 percent. The overall economic situation in the country has improved, following the relaxation of COVID-19 restrictions and measures to boost liquidity in all sectors. As a result, financial liquidity in Asia has seen a faster recovery than other regions in the third and possibly fourth quarters of the year.


Regarding the liquidity measures, which include temporary suspension of debt repayments, the Finance Minister said his ministry will continue implementing them, while overseeing the scope of duties of state-run financial institutions to improve the liquidity of the business sector. The ministry is currently coordinating with all banks, and the issue will be clear early next week.

thainews.prd.go.th
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: Banks viruscrisis - Thai household debt levels to rise even further
« Reply #66 on: October 22, 2020, 05:07:32 PM »
Thai household debt levels to rise even further - c.bank gov
(Reuters) - Thailand’s household debt levels, already at the highest in 17 years, are expected to rise further, the central bank governor said on Thursday, as the coronavirus pandemic hammers its trade-and tourism-reliant economy.

Southeast Asia’s second’s largest economy suffered its biggest contraction in 22 years in the second quarter and could shrink a record 7.8% this year, the Bank of Thailand (BOT) has forecast.

“The pandemic had cut jobs, reducing households’ income and debt servicing ability,” Governor Sethaput Suthiwartnarueput told reporters.

“The employment situation has not yet returned to normal,” he said, noting the economy would not get back to pre-COVID levels until the third quarter of 2022.

As of June, household debt rose to 13.59 trillion baht ($435 billion), equal to 83.8% of GDP, the highest since 2003 and among the highest levels in Asia.

The debt was at 79.9% of GDP at the end of 2019.

The Federation of Thai Industries has estimated job losses at a record 2.5 to 3 million this year, of which more than a million are in the tourist sector. Thailand has a workforce of about 38 million.

reuters.com
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Profits at top banks fall more than 50% in 3rd quarter
Profits of nine banks fell by an average 55 per cent in the third quarter this year due to their high reserves to cope with the economic impact of Covid-19.

Excluding Krungsri (Bank of Ayudhya), the nine commercial banks' accumulated third-quarter net profit was Bt23.57 billion, down an average 55.18 per cent from Bt82.13 billion in the same period last year. The banks' net profit in the first nine months this year was Bt87.18 billion, down 34.5 per cent from Bt133.15 billion from last year.

Most of the drop in profit was attributed to the rise in reserves to cope with debt defaults amid the economic slowdown.

The five banks showing the biggest third-quarter profit drop were CIMB Thai Bank – down 77 per cent to Bt81 million; Siam Commercial Bank – down 68.9 per cent to Bt4.64 billion;

Bangkok Bank – down 57.4 per cent to Bt4.01 billion; Krungthai Bank – down 51.9 per cent to Bt3.05 billion; and Kasikorn Bank – down 32.8 per cent to Bt6.67 billion.

The banks' total reserves for the first nine months were Bt160.62 billion, up Bt61.35 billion or 61.8 per cent year on year. The three banks with the highest reserves are Tisco Financial Group, up 591 per cent; TMB Bank (129 per cent); and Krungthai Bank (87.7 per cent).

Meanwhile, the nine banks' held non-performing loans (NPLs) worth a total Bt474.56 billion at the end of the third quarter, up 17.6 per cent year on year. The three banks with the highest NPLs are Krungthai Bank at Bt110.66 billion, up 0.8 per cent; Bangkok Bank at Bt107.74 billion, up 25 per cent; and Kasikorn Bank at Bt96.74 billion, up 21.9 per cent.

Khattiya Intharawichai, Kasikorn Bank's chief executive officer, said its net profit dropped due to a 70.24 per cent rise in reserves to Bt17.69 billion for expected credit loss during the virus crisis.

Arthid Nanthawithaya, Siam Commercial Bank's CEO, said SCB had assessed the quality of its loan portfolio carefully and was monitoring loan quality deterioration amid the Covid-19 fallout. The bank’s NPLs rose to 3.32 per cent from 3.05 per cent in June.

Kasikorn Research Centre's Kanchana Chokpaisansilp predicts banks will face more challenges in the fourth quarter this year because exports and tourism are yet to recover.

"We expect the banks' fourth-quarter expenses to rise more than the previous quarter from setting up of reserves to cope with future risks, which will see net profits stay in negative territory," she said.

"Meanwhile, banks' NPLs this year would rise more than our previous forecast of 3.5 per cent due to increasing risks," she added.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

Offline thaiga

  • Global Moderator
  • Korat forum specialist
  • *****
  • Posts: 19226
Re: Banks viruscrisis - Job woes add to swelling debt load
« Reply #68 on: October 23, 2020, 01:16:56 PM »
Job woes add to swelling debt load
Falling income hits repayment ability

A rising under-employment rate driven by the Covid-19 crisis will further aggravate the country's swelling household debt and borrowers' debt-servicing struggles, says the Bank of Thailand chief.

Although the coronavirus outbreak has not significantly impacted the unemployment rate, due to workers moving from the service sector to the farm sector in their hometowns, the pandemic has induced a rise in under-employment because of a decline in working hours, said governor Sethaput Suthiwartnarueput.

The scenario has led to lower household income and reduced debt repayment ability among consumers, Mr Sethaput said.

The ratio of household debt to GDP rose to 84% in the second quarter, an 18-year high, with a value of 13.6 trillion baht, up from 13.5 trillion baht or 80.3% of GDP in the first quarter, according to central bank data.

The ratio could rise to 88-90% at year-end 2020 as a result of the economic slowdown, said Kasikorn Research Center.

Given households' weaker debt-servicing ability, this could further increase the household debt ratio, Mr Sethaput said.

The higher under-employment rate will particularly come from the tourism sector, which has been feeling a heavy impact from the pandemic, he said.

Although exports are another sector affected by the pandemic, this segment has endured a lesser impact than the tourism industry because 50% of the country's shipments come from the three core industries, namely automotive, electronics and petrochemicals.

As the economic recovery is poised to remain uneven, it will take at least two years for the economy to return to the pre-Covid growth trajectory, according to the central bank.

Under this scenario, the labour market and employment conditions will need more time to return to normalcy, Mr Sethaput said.

The central bank predicts the economy to contract by 7.8% this year, with the figure expected to improve to 3.6% next year.

The Bank of Thailand forecasts Thailand's economy to begin showing a positive growth rate in the second quarter of 2021 and return to a normal growth trajectory in the third quarter of 2022.

Central bank officials have implemented targeted debt moratorium measures, scheduled to end next June, for small and medium-sized enterprises (SMEs) with a credit line below 100 million baht and having difficulty servicing existing debt.

The measures will only apply to targeted SMEs that cannot cope with repaying loans to financial institutions, on a case-by-case basis.

Broad-based measures, particularly the suspension of principal and interest payment, would lead to moral hazard and financial indiscipline, which could subsequently affect the country's household debt ratio.

"Today's debt suspension could result in a debt balloon for the next day, increasing the financial burden of borrowers," Mr Sethaput said. "Therefore the central bank wants to ask borrowers who cannot service debts to contact banks about debt restructuring."

theworldnews.net
Anyone who goes to a psychiatrist should have his head examined.

 



Thailand