BAAC will maintain an NPL ratio limited to 4% of total loans
A BAAC agency offers aid to farmers during the pandemic.
The Bank for Agriculture and Agricultural Cooperatives (BAAC) aims to limit its non-performing loan ratio (NPL), preventing it from exceeding 4% of total outstanding loans through debt restructuring measures .
The bank’s NPL ratio stood at 3.95% of its baht 5,000 billion loan portfolio in September, compared to 4.03% recorded in March.
The bank’s one-year debt suspension program will end in June of next year. Some 3.25 million farmers have joined the program, representing a total debt of 1.45 trillion baht.
BAAC will continue to restructure the debts of borrowers grouped in the green zone, classified as those with normal debt service capacity, in order to prevent these loans from turning into NPL, said the executive vice president of the BAAC, Surachai Rusmee.
Some 72% of borrowers in the debt restructuring program are in the green zone.
For borrowers clustered in the yellow zone, the bank will restructure that segment of debt until next month, Surachai said.
The Bank of Thailand will not classify loans in debt restructuring programs as non-performing loans if they are successfully restructured before the program ends. Some 23% of the borrowers of the program are in the yellow zone.
The orange zone group signifies borrowers in need of both debt restructuring and income rehabilitation. Only 3% of the borrowers of the program are in this zone.
The red zone group classifies borrowers with debt service problems who need help reducing their debt. The cluster represents 2% of the total.
The black zone cluster, which represents less than 1%, is classified as a debt write-off due to the inability of borrowers to repay their debts.
For borrowers able to service their debts normally, BAAC has launched a campaign to return 10-20% of interest payments to borrowers, which will be forwarded for approval to the bank’s board later this year. this month.
BAAC has offered low-interest loan programs worth a combined 220 billion baht to help affected farmers this year.
BAAC is Thailand’s largest lender for agricultural loans, with a total loan value of 1.5 trillion baht covering 6 million households.