Fitch Ratings indicates that the Thai government’s recent debt relief proposals are unlikely to significantly impact the credit metrics of Thai banks in 2025 due to the initiative’s limited scope.
While the debt relief scheme might aid borrowers with debts up to THB 890 billion (around USD 26 billion), most of these debts are already accounted for as Stage 2 or Stage 3 loans and provisioned or written off by banks. The restructuring proposed under the initiative, such as reduced instalment and interest waivers, aligns with typical bank offerings to troubled clients, thus minimizing its impact on bank credit metrics.
The government plans to compensate banks by redirecting 50% of their contributions to the central bank’s Financial…
