Since the economic crash of three years ago, Thailand’s banks have been enmeshed in a web of bad debts generated by the crash. However, whilst relief is not imminent, it is at least thought to be on the way.
The major banks have finished their main provisioning for non-performing loans and debt restructuring has developed substantially in recent months. The industry is still expected to lose money overall this year, but the leading banks are expected to bounce back in 2001.
Progress in clearing up bad debts remains slow. Non performing loans reached a peak of 47.7% of total lending last May. At the end of June they represented 32% of total lending. Private sector banks are performing better in this respect than their state controlled counterparts with non-performing loans accounting for 22% of total lending for private banks and 56% for state banks.
