NPLs in consumer sector go up

NPLs in the consumer sector totalled Bt59.3 billion, or 3.61 per cent of total loans, in the first quarter, a net increase of about Bt4 billion from the previous quarter, when the ratio stood at 3.39 per cent.

Both new and re-entry NPLs in the sector escalated at a higher pace than in last year's fourth quarter, soaring a combined Bt16.3 billion, compared to Bt13.6 billion in the previous quarter.

New NPLs jumped Bt12.3 billion, compared to Bt10.7 billion in the fourth quarter of 2008. Re-entry NPLs climbed by Bt3.3 billion, compared with Bt2.3 billion in the previous quarter, the BOT said. Debt-restructuring by banks, along with other factors, saw bad loans in the consumer sector decline in the quarter, albeit at a slower pace.

The bad loans decreased by Bt10.6 billion in the first quarter, less than the Bt15.5-billion drop seen in the fourth quarter of last year.

Banks typically make strong efforts to reduce NPLs in the last quarter of the year in a bid to brush up their balance sheets.

As a result, NPLs in the consumer-loan sector accounted for 14.11 per cent of total NPLs in the first quarter, compared with 13.78 per cent in the previous quarter.

According to the BOT, NPLs, excluding those in the financial sector, have increased across the board amid the economic downturn.

Those in the commerce sector totalled Bt65.4 billion, or 6.46 per cent of total loans, up from 5.75 per cent in the previous quarter. They accounted for 15.58 per cent of total NPLs, compared with 15.27 per cent in the fourth quarter.

Many debtors who had already completed debt restructuring saw their loans become nonperforming again. These re-entry NPLs increased by Bt2.78 billion in the first quarter, up from an increase of Bt1.97 billion the previous quarter. New NPLs, however, rose at a slower pace in the quarter.

Re-entry NPLs increased at a speedy pace in the property and construction sectors. In the former, they expanded by Bt1.83 billion in the first quarter, up from a Bt1.34-billion increase in the previous quarter. The construction sector's re-entry NPLs grew by Bt899 million, compared with Bt369 million in the fourth quarter of last year.

New NPLs in the manufacturing sector increased at a higher pace in the first quarter, rising Bt14.87 billion, compared with Bt12 billion in 2008's fourth quarter.

The central bank is optimistic that the increase in NPLs will slow, however, due to expected recoveries in the global and domestic economies.