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Bangkok Post Local bank loans shrink the most in 15 years

This represents a significant decline from the 1.2% year-on-year growth in 2023.

The Banking Industry’s Performance in 2024

The banking industry’s performance in 2024 was marked by a significant decline in loan growth. This decline can be attributed to various factors, including:

  • Rising interest rates
  • Economic uncertainty
  • Increased regulatory requirements

    • These factors have led to a decrease in consumer and business confidence, resulting in reduced borrowing and spending.

    The Impact of Rising Interest Rates

    Rising interest rates have had a profound impact on the banking industry in 2024. With interest rates increasing, borrowing costs have risen, making it more expensive for consumers and businesses to take out loans.

    Consumer loans experienced a 2.1% increase in 2024, down from 4.2% in 2023.

    The State of Personal Loans in 2024

    The personal loan market has experienced a slowdown in growth, with a 1.3% increase in 2024, down from 3.7% the previous year. This decline can be attributed to various factors, including the economic downturn and increased competition from other financial products.

    Factors Contributing to the Slowdown

  • Rising interest rates: Higher interest rates have made borrowing more expensive, leading to a decrease in demand for personal loans. Increased competition: The rise of alternative financial products, such as credit cards and peer-to-peer lending, has increased competition for personal loans. Economic uncertainty: The economic downturn has led to increased uncertainty, causing consumers to be more cautious in their borrowing decisions. ## The State of Mortgage Loans in 2024*

    • The State of Mortgage Loans in 2024

    Mortgage loan growth has edged up marginally to 0.3% in 2024, a significant decrease from the 3.7% growth seen in the previous year. This slowdown can be attributed to various factors, including the economic downturn and increased competition from other financial products.

    This leaves a significant number of borrowers still in need of assistance.

    The “You Fight, We Help” Debt Relief Initiative: A Step Towards Mitigating Bad Debt

    The “You Fight, We Help” debt relief initiative is a significant step towards addressing the growing issue of bad debt in the country.

    The initiative aims to reduce the number of NPLs by 50% over the next two years.

    The Impact of the Initiative on Home Loan Borrowers

    The initiative is primarily focused on reducing the number of non-performing loans (NPLs) in the mortgage market. This is achieved through a combination of regulatory measures, industry-led initiatives, and government support. The goal is to improve the overall health of the mortgage market, making it more resilient to future economic downturns.

    Key Objectives of the Initiative

  • Reduce the number of NPLs by 50% over the next two years
  • Improve the quality of the loan portfolio
  • Enhance the stability of the mortgage market
  • Support the growth of the mortgage industry

    • How the Initiative Affects Home Loan Borrowers

    The initiative has a direct impact on home loan borrowers, who represent a key segment of the mortgage market.

    “The bank will take industry concerns into account along with other economic data before making any policy decisions.”

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