The Government Savings Bank has launched an assistance programme as part of its risk-management strategy to help mitigate the debt burden faced by customers affected by the economic slowdown resulting from the protracted political turmoil.
GSB, which has followed many commercial banks in focusing on “debt quality” – that is, lending to people likely to be able to pay the money back on time – announced it would lower monthly instalments for six months for debtors who are on a salary, own a shop or run a small to medium-sized enterprise.
The programme is open to customers from today until July 31.
“GSB or other banks do not want to see their quality of debt deteriorated,” said Tachaphol Kanjanakul, first senior executive vice president and acting president. “But given the financial stress many clients are under, we can help them relax in a bid to do good for the overall economic system.”
GSB is one of the country’s largest banks, with total assets of about Bt2 trillion, of which 80 per cent (Bt1.6 trillion) comes from lending and the remainder investments (mostly government bonds).
A source at GSB said the assistance programme was introduced after the bank was hit by several negative factors as the economy slowed down, resulting in a significant rise in non-performing loans in the first quarter compared with the final three months of 2013, with NPLs reaching 1.5 per cent of its total lending.
The industry average for NPLs stood at about 3 per cent in the first quarter.
The source said the bank’s NPLs in the second quarter dropped slightly from the first three months and it would not let its bad-loan rate exceed 1.5 per cent.
“The way we reacted was in line with reports by the National Credit Bureau on the rise in household debt, warning us to watch risks and manage how to maintain the quality of our assets,” the source said.
The source added that although the bank was set up to support government policy, it needed to take care of its shareholders as well.
Customers interested in taking part in the assistance programme must have either a normal or special-mention loan classification, must not have made a payment for more than three straight months and must not have a loan exceeding Bt50 million.
According to GSB data on March 31, the bank had 2.94 million debtors with Bt1.69 trillion in total loans.
Of the total, Bt1.62 trillion (2.7 million debtors) was normal debt, Bt44.76 billion (125,233 million debtors) was special-mention (delinquent) debt, and Bt25.93 billion (121,488 million debtors) was NPLs.
In the first quarter, GSB launched a measure to help rescheduled the debts of NPL debtors who have not made a payment for between 90 and 180 days.
The bank is also offering a lower penalty rate of 14 per cent annually, which is helping 10,600 customers with Bt5 billion worth of debt in total.