BANGKOK, Aug. 27 (Xinhua) -- Thailand's banking sector has remained resilient in the second quarter, thanks to solid levels of capital, loan loss provisions and liquidity, the Thai central bank said on Tuesday, despite a slowdown in loan growth amid rising credit risk.
According to the Bank of Thailand (BOT), loan growth in the Southeast Asian country's banking system slowed to 0.3 percent year on year in the April-June period as business loans remained relatively unchanged, consumer loans expanded at a slower pace and loans to small and medium-sized enterprises (SMEs) continued to contract.
The non-performing loans (NPLs) rose slightly to 540.8 billion baht (15.89 billion U.S. dollars) in the second quarter, representing a 2.84 percent NPL ratio and primarily driven by consumer loans, while commercial banks continued to manage their loan portfolios and aid debtors, the central bank said in a statement.
Profitability in the banking sector improved compared to the previous quarter, mainly due to seasonal dividend income even with an increase in provisioning expenses, said BOT Assistant Governor Suwannee Jatsadasak.
It remains essential to monitor the debt serviceability of SMEs and vulnerable households, especially those facing structural issues and slow income recovery, which could lead to a gradual rise in NPL levels, but the risk of a sudden surge remains low and manageable, Suwannee told a news conference. ■