Thai banks say they can handle virus impacts
As the Coronavirus-Covid-19 continues to spread in Thailand, authorities have temporarily closed shopping malls, entertainment venues and sporting venues while allowing food stalls and restaurants to open, but only for take-out and delivery services . The measures have led to social disruption, unemployment, unpaid leave and wage cuts.
However, a senior Bank of Thailand official reports: “Thailand’s banking sector is strong enough to defend against a possible surge in bad loans as well as cases of debt restructuring resulting from the ongoing coronavirus outbreak and official measures to contain the spread ”.
Senior Director of the Economics and Policy Department Don Nakornthab said banks have sufficient capital cushion in the event of higher delinquent payments and debt restructuring. Unlike the 1997 Tom Yum Kung crisis (Asian financial crisis in Thailand), the financial situation of the banking system is now much more solid.
“At the end of 2019, the capital funds of the banking system stood at 2.8 trillion baht, with a capital ratio of 19.6% and an allowance for loan losses of 701.2 billion baht, according to the data of the central bank.
“The NPL coverage ratio was stable at 149.9% at the end of last year, and the liquidity coverage ratio remained high at 187.5%.
“The banking system recorded a 30.8% increase in net profit to 270.9 billion baht in 2019.”
Siam Commercial Bank co-chairman Apiphan Charoenanusorn said more than 100,000 customers with more than 150 billion baht in total loans have requested financial assistance to ease their burden after the bank launched the program in February.
Last week, the central bank set guidelines for the minimum help financial institutions must offer debtors to ease their financial burden amid the pandemic, which goes into effect on April 1. All lenders, including commercial banks, specialized financial institutions, and non-banking and leasing companies, are required to comply with guidelines covering 6 types of loan products…
- Credit card
- Personal and auto title loans
- Auto and motorcycle loans
- Machine rental
- PME – Nanofinance and Microfinance Loans
Krungthai Bank data shows that the bank has already provided financial assistance to 1,500 clients with combined loans of 30 billion baht, while another 70,000 clients with total loans of 250 billion baht are pending.
The strongest demand for debt restructuring is on mortgage and personal loans from the bank.
At the Government Savings Bank, Chairman and CEO Chatchai Payuhanaveechai said GSB had offered a three-month grace period on principal and interest to all debtors who were still performing the service of the debt and defaulted for less than three months from the end of March.
“The program will run until June 30 and automatically apply to qualified debtors without any registration requirements, adding that those who do not wish to participate in the program can honor their debt as usual.”
SOURCE: Bangkok Post
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