The Thai financial sector's non-performing loans burden shrank to 17.91 percent of total loans in 2000, down from 38.93 percent a year ago, the central Bank of Thailand said Tuesday.
Bad loans at end-December stood at 858.214 billion baht (20 billion dollars) compared to 1,113.0 billion baht, or 22.7 percent of total loans, the month before, and 2,086.9 billion in December 1999, it said.
The mountain of non-performing loans (NPLs) is one of the most troublesome areas of the Thai economy which is struggling to shrug off the effects of the 1997 financial crisis.
Analysts warn that although NPLs decreased over 2000, the remaining debt burden will be extremely difficult to sort out. They also accuse banks of putting off the toughest NPL cases by rescheduling debt well into the future.
Many of the remaining bad loans are in sectors such as property that were decimated by the Asian economic crisis and will probably take years to rebound.
The NPL quagmire has also had a major impact on the growth of new bank loans, which are crucial if Thai companies are to shrug off the financial crisis and begin expanding again.
Because banks have such a high percentage of bad loans on their books, they are unable to take the type of loan risks necessary to stimulate the economy.
The central bank said state-owned banks reported combined NPLs of 307.952 billion baht last December, representing 21.62 percent of their total loans, while foreign full-branches posted NPLs of 38.279 billion baht, or 6.62 percent.
Performing loans in the financial sector accelerated to 3.933 trillion baht from 3.338 trillion baht at end June, it said -- BANGKOK (AFP)
© 2001 Al Bawaba (www.albawaba.com)
