Economic slump drives down BAAC loans
Farmers line up for help at the BAAC branch in Samut Prakan. (Photo: Somchai Poomlard)
The loans of the Bank for Agriculture and Agricultural Cooperatives (BAAC) in the first quarter of its fiscal year increased at a lower rate than the same period the previous year, attributed to a slowdown in the economy, a said President Tanaratt Ngamvalairatt.
BAAC’s accounting year begins on April 1 and ends on March 31.
The bank loaned 1.16 billion baht from April to June 2021, down 30% year on year.
The bank’s best-case scenario for non-performing loans (NPLs) this year is an increase to 4%, but they could reach 5% in a worst-case scenario.
The bank’s NPLs in June this year stood at 3.86% of the total outstanding loans of 1.550 billion baht.
BAAC expects its loans this year to exceed the 69 billion baht it posted last year, but achieving that goal depends on economic growth.
Some economists predict a range of outcomes, from a 1% contraction to zero growth.
The finance ministry has predicted average economic growth of 1.3% this year, according to its latest forecast.
Mr Tanaratt said this year that the bank is focusing on loan quality rather than loan expansion, in line with the epidemic’s impact on the bank’s income.
BAAC has offered debt relief to its clients by suspending their principal and interest payments.
The bank granted a one-year suspension of debt repayment for customers who are required to repay their debt on an annual basis, and a six-month suspension for those who repay debt on a monthly basis.