Bad debts on credit cards and personal loans fall in June

Credit-card NPLs fell from 3.5 per cent of total loans in March to 3.1 per cent in June, totalling Bt5.5 billion, while those of personal loans were Bt9.3 billion or 4.4 per cent of total loans in June, compared to 4.6 per cent at the end of March.

Bank of Thailand assistant governor Krirk Vanikkul said the fall in delinquent loans was due to aggressive action by credit-card issuers who wrote off many of the bad loans in the middle of the year.

Krirk said despite the 6-per-cent increase in the number of credit-card loans on a year-on-year basis, totalling Bt179.1 billion in June, the figures did not indicate that the default rate had increased.

The number of outstanding personal loans rose 8 per cent in June, compared with the same period last year. The growth rate was unexceptional over recent months.

"As long as the percentage remains in single figures, we are not concerned," the assistant governor said.

According to the BOT, total spending via credit cards rose 16.4 per cent on year to Bt75 billion in June. Domestic spending on cards reached Bt55.7 billion, up 20.6 per cent on the same month last year. Of this amount, Bt27.8 billion was spent via cards issued by Thai banks, Bt19.2 billion by non-bank companies and Bt8.6 billion on plastic issued by foreign banks.

Spending on cards abroad expanded 18 per cent to Bt2.9 billion in June, of which Bt1.21 billion was spent on cards issued by non-bank companies, Bt1.1 billion by Thai banks and Bt624.4 million on cards issued by foreign banks.

However, the amount borrowed via cash advances grew only 3.6 per cent to Bt16.3 billion in June. Withdrawals using cards issued by Thai banks totalled Bt11.2 billion, up 4.2 per cent. Withdrawals on cards issued by non-bank companies increased 4.4 per cent to Bt4 billion in the same month. But cash advances on cards issued by foreign banks dropped 5.4 per cent to Bt1.1 billion.