BANGKOK, May 20 (Xinhua) -- Thailand's banking sector demonstrated resilience in the first quarter of 2025, supported by high levels of capital, loan loss provisions and liquidity amid heightened credit risks, the central bank said on Tuesday.
According to the Bank of Thailand (BOT), loan growth across the country's licensed banks and subsidiaries fell 1.3 percent year-on-year in the January-March period, accelerating from a 0.4 percent decline recorded in the previous quarter, mainly driven by high debt repayments.
Despite large corporate loans exhibiting continued expansion, loans to small- and medium-sized enterprises (SMEs) and consumers contracted due to elevated credit risks, BOT said in a statement.
The sector's gross non-performing loans (NPLs) increased to 548.1 billion baht (about 16.56 billion U.S. dollars) at the end of March, equivalent to an NPL ratio of 2.9 percent, up from 2.78 percent at the end of December, said BOT Assistant Governor Suwannee Jatsadasak.
This deterioration mainly stemmed from SME and mortgage loans, as well as an increase in NPL ratios for credit card and hire-purchase loans, exacerbated by a contracting loan base, Suwannee told a news conference.
On the profitability front, the Southeast Asian nation's banking sector improved in the first quarter compared to the previous three months, driven by reduced operating expenses and increased non-interest income from investment gains and revaluation of financial instruments, she said.
The central bank emphasized the necessity to closely monitor financial conditions, particularly the debt servicing capabilities of vulnerable businesses and households amid ongoing economic uncertainties.
Additionally, global trade policies and their potential impacts on Thai businesses and households require observation, along with the effectiveness of the central bank's debtor assistance measures, it said. ■