In the first two months of this year, Bangkok Bank has seen a jump in special-mention loans from businesses that are still trying to recover from the great flood of 2011.
Suvarn Thansathit, senior executive vice president, said yesterday that the bank started seeing bad signs of business interruption last year even before the political crisis.
Some companies were taken off the delinquent list by the end of last year but the political uncertainty has taken a toll on them, causing them to once again delay loan payments.
Special-mention loans at BBL soared to Bt30 billion from Bt20 billion, while non-performing loans climbed to 2.3 per cent, or Bt40 billion out of Bt1.6 trillion outstanding loans, from 2.18 per cent last year.
Loans that have not been serviced for more than 30 days but less than 90 days are classified as special mention. Without assistance to borrowers, special-mention loans can grow into NPLs.
The bank has to offer a new scheme by injecting money to help special-mention loan customers who cannot improve their business through the normal assistance programme with measures such as payment extensions and grace periods.
“We will open a credit line of Bt20 million for a customer whose existing debt with the bank amounts to Bt50 million-Bt100 million,” he said.
However, the rise in special-mention loans will not force the bank to set aside extra loan-loss reserves because its coverage ratio was 214 per cent, the highest among its peers.
Earlier, Krungthai Bank raised concerns over rising special-mention loans, especially of small-business customers with credit lines of up to Bt20 million, after the bank saw an increase in 30-day-late payments and bounced cheques.
KTB will send its staff to meet any customer who delays payment for more than two months, to offer assistance.
At BBL, the quality of NPLs is not an issue because its portfolio is mainly corporate loans, and the bank believes the investment cycle of corporate customers will continue as they need to cope with the Asean Economic Community next year, the bank’s executives told analysts at a recent meeting.
BBL expects its NPLs this year will stabilise at 2.2 per cent.
Based on its loan-growth target of 5-7 per cent, overseas loans are expected to expand 5 per cent, corporate loans 4-6 per cent, SME loans 6-8 per cent and retail loans 8-10 per cent.
BBL is bullish on exports this year thanks to the global economic recovery. This will boost fee income from trade finance, cash management and overseas lending.
The country’s largest bank by assets projects fee-income growth of 10 per cent this year.