Thai bank lending picks up, bad loans edge down

Two quarters of loan expansion a turnaround from six quarters of contraction PUBLISHED : 18 Aug 2026 at 15:39 A customer visits a Government Savings Bank booth at an event in Pathum Thani province in 2021. Non-performing loans at Thai commercial banks decreased slightly in the second quarter of this year. (Photo: Pongpat Wongyala) Lending by Thai banks rose 2.0% in the second quarter of 2026 from a year earlier, following a 0.2% rise ‌in the previous quarter, the Bank of Thailand said on Tuesday.The two consecutive quarters of expansion in commercial bank lending mark a turnaround from six straight quarters of contraction, which reflected sluggishness in the economy and high household debt levels. Non-performing loans stood ​at 2.82% of outstanding credit at the end of June, down slightly from 2.85% at the end of March, as banks accelerated efforts to manage bad debt, the central bank said. The banking system remained stable, but uncertainty surrounding the conflict ⁠in the Middle East and the uneven recovery of the economy weighed on debt-servicing capacity, it said. Lending is expected to continue expanding in the third quarter, driven by demand from large firms ​for working capital and for raw materials, Suchot Piamchol, senior director for modelling supervision and risk assessment at the BoT, said at a briefing. Non-performing loans could ​increase ‌among vulnerable sectors, such as construction and real estate businesses, he said. The household debt-to-GDP ratio ​in ⁠the second quarter did not show signs of rising, despite slower economic growth, as debt ⁠levels declined and banks continued to sell distressed debt, he said. The data will be released next month. Household debt stood at 16.4 ⁠trillion baht at the end of March, ​or 85.9% of GDP, among the highest levels in Asia.