Thailand’s Q1 loan growth masked continued weakness in SME and consumer credit

Large corporates drove the increase

Loans across licensed banks and their subsidiaries were up 0.2% from a year earlier. Large corporate lending resumed growth, partly because some firms needed more working capital as energy and raw-material costs increased amid the Middle East conflict.

SME and consumer lending moved in the opposite direction. Both continued to contract as credit risk remained elevated, according to the central bank. That split helps explain why modest system-wide growth did not amount to a general easing of credit for smaller borrowers.

The same report put gross non-performing loans, classified as Stage 3, at 535.8 billion baht. The NPL ratio held at 2.85%, while Stage 2 loans — exposures showing a significant increase in credit risk — fell to 7.0%. The Bank of Thailand said part of that decline reflected improved risk classification and renewed debt servicing among some borrowers, while banks continued early debt restructuring for customers showing signs of repayment stress.

For practical context, see Thailand economy and finance. This development also connects with Thailand bank lending grew 2%, but credit stayed uneven.

The Q2 update strengthened the same pattern

By the second quarter, overall loan growth had accelerated to 2.0% year on year, but the composition remained similar: large corporates were again the main source of expansion, while SME and consumer lending continued to shrink. NPLs edged down to 534.8 billion baht, equivalent to 2.82% of total loans, and the Stage 2 ratio fell to 6.78%.

For an individual borrower, these figures are context, not an approval signal. They describe risk and lending trends across the banking system; they do not determine how a particular bank will assess one household or business application.