The Bank of Thailand published its Banking Sector Quarterly Brief for the first quarter of 2025, assessing the Thai banking system as resilient with strong capital, loan-loss provisions and liquidity, and reporting a quarter-on-quarter improvement in profitability. It nevertheless highlighted the need to monitor tight financial conditions and borrowers’ debt serviceability, as well as the impact of global trade policies and the effectiveness of assistance measures under the “Khun Soo, Rao Chuay” program. Bank lending (licensed banks and their subsidiaries) contracted by 1.3% year on year, reflecting high debt repayments, with large corporate credit still expanding while SME and consumer lending continued to shrink amid elevated credit risks. Gross non-performing loans increased to THB 548.1 billion, lifting the NPL ratio to 2.90%, mainly due to SMEs and mortgages, while higher NPL ratios for credit card and hire-purchase loans reflected a declining loan base; Stage 2 loans fell on large corporate repayments, leaving the Stage 2 ratio broadly stable at 6.97%. Profitability improved from the previous quarter on lower operating expenses and higher non-interest income from investments and financial instrument revaluations, partly offset by lower net interest income following interest rate cuts, and banks continued to provide borrower assistance and manage loan portfolios.

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