Bad loans still elevated as Iran war hammers firms

Central bank to monitor lending

The Monetary Policy Committee assessed that overall banking credit quality remains stable, but the debt repayment ability of SMEs and vulnerable households should continue to be monitored, says Mr Don. (Photo: Pongpat Wongyala)

The Bank of Thailand intends to focus on asset quality in the banking industry as non-performing loans (NPLs) remain at elevated levels, attributed in part to the impact of the Middle East conflict, says the central bank's chief.In response to repercussions from the US-Israel war against Iran, the regulator required banks to conduct stress tests in May to evaluate their resilience against risks and shocks.

The results showed an improvement from the April figures, said central bank governor Vitai Ratanakorn.

Risks stemming from the lingering Middle East conflicts have affected both corporate and retail borrowers, reducing the debt repayment ability of households and small and medium-sized enterprises (SMEs).