Trend could affect high-income segment
The central bank is concerned high-income borrowers could follow a similar trend as middle- to lower-income groups because of softening economic growth.
The Bank of Thailand has expressed concerns over declining asset quality among higher-income borrowers, following a similar trend observed for middle- to lower-income groups, aligning with the softening of economic growth.
According to the edited minutes of the central bank’s Monetary Policy Committee (MPC) meeting held on Feb 21-26, some members voiced concerns about the deterioration in loan quality among low-income groups, which could potentially extend to higher-income groups.
A further decline in loan quality could prompt financial institutions to adopt more cautious lending practices, especially for mortgages and hire-purchase loans.
In response, these institutions have already started exercising greater caution in approving high-value mortgages, a trend the regulator plans to monitor.
Although overall loan growth and credit quality showed signs of stabilising, financial institutions remain cautious due to a slowdown in loan growth. Business loan growth was primarily driven by large corporations, while loans to
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