KBank reduces exposure to small businesses
Kasikornbank (KBank) chief executive Kattiya Indaravijaya said Stage 2 loans were growing sharply across the industry. Borrowers already in arrears, but not yet more than 90 days overdue, were among those requiring close attention.
KBank’s exposure was less pronounced than the industry’s because it had tightened lending in 2022–2023, although monitoring remained essential. More factory closures and business shutdowns were becoming visible, including among some of the bank’s customers.
Kattiya said loan quality remained manageable, but that position reflected lessons from substantial losses in 2022–2023, when the bank had needed to make heavy provisions.
“The wounds are still fresh,” she said.
Those losses had prompted KBank to restrict new lending to some groups. Although the bank had faced criticism for withholding credit, she said the decisions were necessary to protect stability and explained its continued caution.
Retail borrowers had caused significant losses, particularly online sellers without documentation or bank statements that could support a reliable risk assessment. KBank was now placing greater emphasis on salaried customers with clear payslips and using credit scoring to assess both repayment capacity and willingness to pay.
For SMEs, the problem extended beyond funding or liquidity. Some business models could no longer compete and needed to be redesigned through technology adoption and diversification.
KBank had consequently reduced SME loans from 35–36% of its portfolio to 24%, while increasing the shares of large corporate lending and higher-quality retail loans.
Bangkok Bank maintains risk and provisioning plans
Bangkok Bank president Chartsiri Sophonpanich said bad debt had increased somewhat, in line with concerns identified by the BOT, but remained manageable as the bank continued helping customers.
Despite volatility, the bank had made no significant changes to its existing risk-management and provisioning plans, having prepared in advance for different risks.
Asked about the difference between interest rates charged to SMEs and large businesses, Chartsiri said Thai interest rates were relatively low in a broader comparison.
Long-term survival depended on competitiveness, he said. Businesses needed to find new markets, adapt their operations and strengthen their capabilities to keep pace with what he described as gradually improving economic conditions.
Weak businesses cannot recover through rate cuts alone
TMBThanachart Bank (ttb) chief executive Piti Tantakasem said the divide between the stronger and weaker parts of Thailand’s K-shaped economy was making debt problems more complex.
He characterised much of the stronger segment as import-focused electric-vehicle businesses that delivered limited benefits to the wider economy because they did not use Thai workers or domestic materials.
The weaker segment was broad and deteriorating further, he said, producing both new defaults and repeat defaults among borrowers whose loans had already been restructured.
“If a company is making losses from the outset because nobody is buying its products, or Chinese goods are taking its market, even cutting its interest rate to 0% will not get it through the crisis,” Piti said.
“The financial sector cannot solve the real sector’s problems.”
He warned that SMEs faced pressure from geopolitics, competition from China and large companies entering their markets.
Piti said ttb had kept bad debt manageable through continuing loan sales. But a lower NPL figure did not necessarily mean the underlying problems had eased.
He compared the situation to a house that appeared clean while its water bill kept rising: persistent credit-risk costs indicated that fresh bad loans were still arriving, requiring banks to write off or sell debt and repeat the clean-up every quarter.
Thailand needed to reinvent its economy and build stronger domestic supply chains, he said. A shared information hub would also help banks identify creditworthy borrowers who deserved another opportunity, reduce unequal access to finance and enable the government to direct support towards people in genuine poverty.
Credit bureau sees deterioration in smaller loans
Luxmon Attapich, chief executive of National Credit Bureau (NCB), said second-quarter data showed a clearer increase in bad debt after several quarters of relative stability, particularly in SME and retail lending.
Bank restructuring had helped contain difficulties, but the latest pattern pointed to greater financial fragility.
She highlighted special-mention loans, or SM loans, where payments were overdue but the debt had not yet become non-performing. Borrowers reaching 60 or 90 days in arrears without recovering their ability to pay risked moving into NPL status as the overdue period lengthened.
“We are beginning to see more SM loans turning into NPLs, mainly because borrowers’ ability to earn income has declined,” Luxmon said. Restructuring might provide relief for a few months, but borrowers could default again if their income did not genuinely recover.
Deterioration was particularly visible among very small businesses using nano-finance. Lending in that segment had expanded strongly as small traders, including sellers on e-commerce platforms, struggled to obtain ordinary commercial-bank credit.
However, nano-finance had a higher proportion of loans overdue by more than 90 days than other loan types, she said.
Personal loans used for consumption were another concern, with arrears exceeding 90 days rising markedly. Hire-purchase lending for mobile phones, computers and household goods also had higher NPL levels than other loan categories.