People maintain social distancing while waiting to access financial services at a branch of the Government Savings Bank in a shopping mall. Varuth Hirunyatheb
The debt repayment capacity of retail customers of the Government Savings Bank (GSB) will gradually return to normal levels in three years after the pandemic is brought under control, said bank chairman Vitai Ratanakorn.
If the epidemics improve this year, the country’s economy will start to recover from 2022, he said.
This recovery process should gradually restore the debt repayment capacities of individual GSB customers to normal levels within 2 to 3 years.
Mr Vitai said that small and medium-sized businesses as well as rural populations have suffered the most from the prolonged impact of the pandemic. The epidemic has hit the service sector, which employs 40 to 50 percent of the country’s total workforce, he said.
The service sector relies on international tourist arrivals, which reached 40 million in 2019. That figure plunged after the start of the first epidemic in April last year.
Last week, the Economic Intelligence Center (EIC), the research house of Siam Commercial Bank, lowered its forecast for foreign tourist arrivals this year from 300,000 to 170,000. However, the EIC expects tourist arrivals to increase to 6.3 million by 2022 thanks to improved infections locally and internationally, as well as a low base effect.
Since the outbreak, the bank has continued to provide financial assistance to customers, most of whom are retail borrowers, to help them cope with the impact of the pandemic.
Mr Vitai said that GSB’s non-performing loans (NPLs) stand at a manageable level of 2.5% of its outstanding loans.
He believes the bank’s NPL will not increase beyond 3.5% of outstanding loans, although some accounts may become NPLs after the bank’s debt relief measures expire at the bank. end of this year.
Mr Vitai said that if NPLs reached 3.5% of the loan portfolio, it was still considered a manageable level.
GSB recently suspended its intention to take legal action against 40,000 customers who became NPLs by August 1 of this year.
The suspension began on September 2 and lasts until December 31.