LENDING & CREDIT | Tony Chua, Thailand

Krung Thai strives to meet NPL standards

Lender now has $1.24bln bad loans as it slices off its second quarter $1.5bln net NPL.

Krung Thai Bank aims to reduce its non-performing loan ratio to international standards over the next three years through a stronger policy on loan-loss reserves and control of bad assets, according to president Apisak Tantivorawong.

The net NPL norm of the international banking industry is 2% of total debt outstanding of each bank. KTB recorded net NPLs for the second quarter this year of 48.3 billion baht ($1.5 billion), or 3.64% of its portfolio of around 1.21 trillion baht ($37.52 billion). Gross NPLs were 81.38 billion baht ($2.52 billion) or 5.98%. The bank's non-performing assets stand at around 40 billion baht ($1.24bln) currently.

Mr Apisak said the conservative policy on loan-loss provision and strong bad-debt management were the key strategies to reduce bad debts effectively. The bank has normally set aside a loan-loss reserve of 500 million baht ($15.5 million) per month, and would continue to do so over the next three years despite improving asset quality. Strong bad-debt management will also help pare bad loans more effectively than asset sales, he said.

View the full story in Bangkok Post.

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