Thailand: Bank Of Thailand To Reduce Banking Sector's Non-Performing Loan To 5% By Year-End

Bank of Thailand expressed confidence that the banking sector's non-performing loans would decline to around 5% of the total loans by the end of 2005. BOT said that the NPL ratio, which now stands at around 8%, is likely to further decline to 2% by mid-2007. The central bank announced that as at end Dec 2005, THB168.6 billion worth of bad loans were under debt restructuring, THB73.32 billion under court consideration and THB127.2 billion were in foreclosure proceedings. Total NPL at the end of 2005 stood at THB476.6 billion, or 8.16% of total loans. BOT said that around two-thirds of the non-performing loans as at end of last year were covered by loan-loss provisions and expects local banks to achieve a recovery rate of around 30% from debt restructuring.