The Bank of Thailand revealed that in the second quarter of 2024, banks had a net profit of 76 billion baht, an increase of 2.7%. The commercial banking system is strong and stable, with high levels of capital, reserves, and liquidity. Ms. Suwannee Jesadasak, Assistant Governor, Financial Institutions Supervision Group, Bank of Thailand, and Ms. Atchana Lamsam, Senior Director, Financial Institutions Modeling and Risk Analysis Department, Bank of Thailand, revealed the overall picture of commercial banks in the second quarter of 2024 that their performance improved from the previous quarter, with net profit of 76 billion baht, an increase of 2.7% compared to the same period last year, or an increase of 11.8% compared to the previous quarter, with net interest income of 173 billion baht and non-interest income of 67 billion baht. Meanwhile, commercial banking system loans (including affiliates) expanded at a slower pace of 0.3% in the second quarter of 2024 from the previous year. Overall business loans wer e stable, while SME loans continued to contract, and consumer loans expanded at a slower pace in line with higher credit risk. Loan quality deteriorated. The outstanding non-performing loans (NPLs) in the second quarter of 2024 increased slightly to 540.8 billion baht, accounting for an NPL ratio of 2.84 percent of total loans, mainly from consumer loans, especially the housing portfolio. However, it is still necessary to monitor the deteriorating debt repayment ability of households, some households whose financial status is still fragile due to slow income recovery, including the debt repayment ability of small SMEs and businesses in groups whose performance may be affected by structural problems and reduced competitiveness, which is expected to result in gradual increase in NPLs, but still at a manageable level and not increasing dramatically (NPL cliff). The ratio of household debt to GDP in Q1 2024 decreased slightly from the previous quarter due to slower expansion of household loans, at 90.8% of GDP, divided into 34% home loans, 11% hire purchase loans, 3% credit card loans, 25% personal loans, 18% business loans, and 9% others. As for the case of the NESDB Secretary, who believes that if there is a debt haircut measure, it should be specific to that group. Ms. Suwannee stated that the BOT agrees that if there is a debt haircut, it should be done only for that group. The BOT agrees that it must take into account the Moral Hazard that will occur and the method of operation that is specific to the group. Source: Thai News Agency