Thailand
Thailand: Economic doldrums cause BAAC loans to decrease
Loans from the Bank for Agriculture and Agricultural Cooperatives (BAAC) in the first quarter of its accounting year expanded at a lower rate than the same period the previous year, attributed to a slowing economy, says president Tanaratt Ngamvalairatt.
BAAC’s accounting year begins April 1 and ends on March 31.
The bank lent 1.16 billion baht from April to June 2021, down 30% year-on-year.
The bank’s best-case scenario for non-performing loans (NPLs) this year is a rise to 4%, but they could reach 5% in the worst case.
The bank’s NPLs as of June this year stood at 3.86% of total outstanding loans of 1.55 trillion baht.
BAAC expects its loans this year to exceed the 69 billion baht it posted last year, but the reaching that target depends on economic growth.
Some economists forecast a range of outcomes, from a contraction of 1% to zero growth.
The Finance Ministry predicted average economic growth of 1.3% this year, according to its latest forecast.
Mr Tanaratt said this year the bank is focusing on loan quality rather than loan expansion, in line with the impact of the outbreak on the bank’s revenue.
BAAC has offered debt relief to clients by suspending their principal and interest payments.
The bank granted a suspension of one year on debt repayment for customers who are required to service debt on an annual basis, and a six-month suspension for those who repay debt on a monthly instalment basis.
Source: https://www.bangkokpost.com/business/2169539/economic-doldrums-cause-baac-loans-to-decrease