BANGKOK, Aug. 18 (Xinhua) -- Thailand's banking sector remained sound with capital, loan-loss provisions, and liquidity at high levels in the second quarter of 2026, though uneven economic recovery and geopolitical uncertainty continued to weigh on debt-servicing ability, the central bank said on Tuesday.
According to the Bank of Thailand, overall commercial bank lending expanded 2 percent year on year in the April-June period, accelerating from a 0.2 percent increase in the previous quarter.
The growth was mainly driven by large corporate borrowers seeking working capital as energy and raw material costs rose, while lending to small businesses and consumers continued to contract in line with still-elevated credit risk, the central bank said in a statement.
On asset quality, non-performing loans (NPLs) stood at 534.8 billion baht (about 16.16 billion U.S. dollars) at the end of the second quarter, down from the previous three months on the back of stepped-up management of loan quality, said the central bank's senior director Suchot Piamchol.
Suchot said the NPL ratio was broadly stable at 2.82 percent, close to 2.85 percent recorded in the previous quarter, which marked the early stage of the Middle East conflict.
On performance, the Southeast Asian country's banking sector net profit rose 6.8 percent to 83 billion baht in the second quarter compared to the same period last year, Suchot told a news conference.
He said the increase was primarily attributed to higher gains on financial instruments, securities brokerage fees, and lower provisioning expenses, offsetting weaker net interest income as banks cut lending rates.
Looking ahead, the central bank flagged continued uncertainty from the Middle East conflict and an uneven recovery as risks to debt servicing, particularly for already fragile small and medium-sized enterprises and households facing volatile incomes and rising living costs.
It added that credit quality trends at commercial banks warrant close monitoring, with ongoing government debt-relief measures and liquidity support from financial institutions expected to help cushion businesses and households going forward. ■