BoT reveals that in 3Q23 commercial banks are stable and stable.

Bangkok, The BoT reveals that in the third quarter of 2023, the commercial banking system is stable and stable. Capital funds - reserves - liquidity is at a high level Loans shrank by 0.9% , keeping an eye on debt repayments of SMEs - vulnerable groups.

Miss Atchana Lamsam, Senior Director Financial Institution Model Inspection and Analysis Department The Bank of Thailand (BoT) issued a statement summarizing the commercial banking outlook for the third quarter of 2023. The commercial banking system is stable and stable. It has a high level of capital, reserves, and liquidity. Loans to the commercial banking system in the third quarter of 2023 shrank slightly at 0.9 percent from the same period last year. From the gradual repayment of debt by the business sector after accelerating continued expansion to enhance liquidity during the COVID period. Especially SMEs, large businesses, export groups, and the government sector, along with the debt quality management of commercial banks, however, business loans can still expand. Mainly in the holding and construction businesses, while retail loans expanded at a slower pace in almost every loan portfolio. In terms of loan quality, it deteriorated slightly. mainly from consumer loans Commercial banks continue to manage debt quality and provide assistance to debtors. As a result, the outstanding balance of non-performing loans (non-performing loan: NPL or stage 3) in the third quarter of 2023 increased slightly to 494.6 billion baht, representing a ratio of NPL to total loans of 2.70 percent, while the proportion of loans that had a significant increase in Credit risk to total loans (significant increase in credit risk: SICR or stage 2) was at 5.84 percent, decreased from 6.08 percent in the previous quarter.

For the 3rd quarter of 2023 operating results improved from the same period last year. This is a result of increased interest income. Even though financial costs increased due to increases in deposit interest rates and FIDF fees returned to normal levels. Including operating expenses and reserve expenses that increased, if compared to the previous quarter. Net profit decreased This was mainly due to a decrease in dividend income due to seasonal factors and a decrease in FVTPL profits from losses from the sale of derivative instruments.

However, it is still necessary to monitor the debt repayment ability of SMEs and some households that are still in a fragile financial position due to slow recovery of income. The ratio of household debt to GDP in the second quarter of 2023 remained stable from the previous quarter. Meanwhile, the business sector's debt-to-GDP ratio increased slightly. In terms of overall profitability, it was stable. The manufacturing sector improved slightly from the chemicals group, contrary to profits in other manufacturing sectors. Meanwhile, the service sector related to tourism is affected by the off-season. -

Source: Thai News Agency