THE asset quality of Thailand’s banks is set to deteriorate in the next 12 to 24 months, with the non-performing loan ratio expected to increase up to 6 per cent, said S&P Global Ratings on Tuesday.
This compares with a reported non-performing loan ratio of 3.3 per cent in 2020 based on the banks S&P rates. 2019’s systemwide average was 3 per cent.
The proportion of the loan book under moratorium has reduced to an average of about 20 per cent for major rated Thai banks, compared with the systemwide average of 31 per cent in the initial phase of the moratorium in mid-2020.
“In our opinion, temporary relief measures are unlikely to eliminate risks for weaker and more vulnerable debtors, although they may lessen the strain and delay recognition of problem loans,” said the ratings agency.
Credit risk is already heightened in Thailand given the very high household debt