The Thai Bankers' Association (TBA) is considering additional measures to improve debt restructuring for vulnerable customer segments in an effort to address the country's household debt crisis.
According to TBA chairman Payong Srivanich, the association is reviewing debt restructuring measures to strengthen household debt solutions, building on existing tools. The additional measures will be specifically tailored to vulnerable customers, primarily individuals and small and medium-sized enterprises (SMEs), he said.
Last week, the TBA discussed household debt solutions with the Bank of Thailand and plans to collaborate with other organisations, including the public sector, regulatory agencies and financial institutions, to develop additional strategies.
Mr Payong emphasised that Thailand's high level of household debt is a structural issue for the country requiring long-term cooperation among all stakeholders. The additional proposed measures will aim to improve borrowers' repayment abilities and include short-, medium-, and long-term strategies to sustainably address the problem.
Regarding new loan growth to support liquidity for both households and businesses, Mr Payong noted that banks will continue to provide financial support based on the risk profiles of each individual customer. For the business sector, strengthening competitiveness is crucial for driving investment and loan growth in the banking industry, he said.
Piti Tantakasem, chief executive of TMBThanachart Bank, who has played a key role in TBA's household debt solution efforts, said local businesses, including both companies and SMEs, need to enhance their competitiveness in the face of increased global competition, especially China's price wars.
The increased challenges have affected Thai manufacturers across various business segments, weakening the country's overall investment and impacting loan growth in the business sector. Simultaneously, the country's household debt problem has slowed consumer loan growth for new loans, while existing debt repayments have continued.
"With these conditions, overall loan growth in the banking sector is expected to contract this year," Mr Piti said.
Kattiya Indaravijaya, chief executive of Kasikornbank (KBank), said the bank is ready to cooperate with the regulatory agencies and the TBA to assist vulnerable customers with debt restructuring.
KBank expects flat loan growth this year, below its initial target of 3-5%, as higher debt repayments offset slower new loan growth in line with the current economic situation.
Despite the slowdown in its overall loan expansion, KBank has seen positive growth in corporate and mortgage loans since the beginning of the year. The bank is focusing on offering loans to existing customers to maintain asset quality and prevent financial fraud, Ms Kattiya added.
