Bad credit-card and personal loans surged at a double-digit pace in the first three months of 2015, reinforcing signs that individuals' debt repayment ability is deteriorating amid the stuttering economy.
Non-performing loans (NPLs) for credit-card spending jumped almost 22% over the same period last year to 8.93 billion baht as of March 31, while that of personal loan rose at a faster pace of 27.4% to 15.5 billion, according to data available on the Bank of Thailand's website.
Bad credit-card loans by commercial banks soared to 6.75 billion baht at the end of March from 5.19 billion in the same period of 2014, while those of non-bank lenders increased at a modest pace to 2.19 billion from 2.13 billion.
Commercial banks' more than three-month overdue personal loans rose to 8.11 billion baht at the end of the first quarter from 6.76 billion baht in the corresponding period last year, while those of non-bank lenders increased to 7.36 billion baht from 5.38 billion baht.
Banks and non-bank companies under the supervision of the central bank saw gross NPLs collectively increase to 298 billion baht at the end of March from 277 billion at the end of last year and 280 billion over the same period of the past 12 months.
The NPL ratio also rose to 2.29% of outstanding loans at the end of March from 2.15% at the end of last December.
The central bank earlier projected NPLs to rise steadily in the first quarter due to the modest pace of economic recovery, while full-year growth of bad loans is not expected to increase substantially, given improving growth impetus. However, the central bank is not worried by the rise in NPLs, as the ratio was still minimal and lenders had high provisions to cushion against the risk.
Kiatnakin Bank recently warned its bad loan ratio could reach 7% in the second quarter as the struggling economy and spiralling household debt erode asset quality.
Household debt more than doubled to 10.4 trillion baht at the end of 2014 from 5.05 trillion at the end of 2008.
In terms of ratio, it stood at 85.9% of GDP at the end of 2014, up significantly from 55.6% at the end of 2008.
As of March 31, a total of 20.6 million credit cards were circulating in the market with outstanding loans of 252 billion baht, while there were 11.8 million personal loan accounts with overall loans of 313 billion baht, central bank data showed.
Credit-card spending rose to 142 billion baht at the end of the first quarter from 131 billion at the end of 2014.
Card spending, classified by category, increased across the board.
Domestic spending was added to 117 billion baht at the end of March from 107 billion at the end of last year, international spending rose to 9.54 billion from 8.42 billion and, most importantly, card cash withdrawals also increased to 16.2 billion from 15.3 billion.
Data show 10.8 million credit cards were issued by non-bank companies and the remaining 9.78 million by commercial banks at the end of the first three months.