Most of the increase comes from re-entry non-performing loans, while new NPLs are under control, Bangkok Bank (BBL)  senior vice president Suvarn Thansathit said yesterday.

Although NPLs have grown this year, they are still lower than a year ago.

The distressed assets of the country's largest bank have hit Bt40.41 billion, or 4.4 per cent of its total loans as of May. Last year in May the bank's NPLs stood at Bt41.74 billion or 4.55 per cent.

Bangkok Bank wants to end this year with NPLs below 4 per cent.

"The sugar industry is probably the bank's biggest problem. This comes from three customers with a combined debt of Bt20 billion or so, averaging more than Bt6 billion each, which contribute 20 per cent of our total NPLs," Suvarn said.

The bank expects one of them to complete debt-restructuring by this year-end. This would probably cut more than 1 per cent off the bank's NPL ratio.

The NPLs of the five other large banks also expanded in the first quarter, except at TMB Bank, which saw its NPLs for the first quarter drop to Bt30.88 billion, or 6.08 per cent, from Bt33.27 billion, or 6.33 per cent, last year.

Krung Thai Bank's bad loans were Bt64.24 billion, or 6.88 per cent, as of March, up from Bt59.04 billion, or 6.26 per cent, as of last December. NPLs at Siam Commercial Bank rose to Bt23.42 billion, or 3.42 per cent, from Bt22.28 billion, or 3.39 per cent.

Kasikornbank recorded total NPLs of Bt21.99 billion, or 3.31 per cent, in the first quarter, up from Bt20.88 billion, or 3.17 per cent.

Bank of Ayudhya's NPLs also rose to Bt28.04 billion, or 6.30 per cent, in the first quarter, from Bt23.37 billion, or 5.34 per cent of total loans in December.

Prasarn Trairatvorakul, president of Kasikornbank, recently said the rise in its bad assets for the first quarter had come from re-entry and new NPLs. The bank aims to trim 2 per cent off its NPLs this year, mainly through debt-restructuring.

Suvarn said it was impossible for Bangkok Bank to receive any payment from high-flying businesswoman Rasri Bualert and her group, even though the Supreme Court has judged that Rasri and her associates are bankrupt. Although the bank is a preferred creditor, it does not hold any collateral. It only has a guarantee from a company in Rasri's group.

In 2002, the bank filed a bankruptcy suit against the businesswoman and nine other defendants in her group for failing to honour debts of Bt9.72 billion in principal and interest.

"The bank wrote off Rasri and her group's debts of around Bt6 billion several years ago. As the case has ended the bank is unlikely to do anything more, though we need the money back," he said.

Although under the legal process the bank can try to negotiate with the customer for another debt-restructuring, it may be useless. Talks took place several times but in vain, until finally they ended up in the bankruptcy process, he added.

Somruedi  Banchongduang

The Nation