Bank of Thailand Reports Q4/2025 Commercial Bank Lending Contracts by 1.1%, NPLs Decrease

The Bank of Thailand (BOT) summarized the commercial banking system for Q4 and 2025, noting its stability and strength with high capital, reserve, and liquidity levels. Overall commercial bank lending (including groups) contracted by 1.1% compared to the same period last year, driven by continued contraction in SME and consumer lending due to high credit risks. Large business lending slightly decreased, partly from reduced credit demand amid economic conditions. Non-performing loans (NPL) in Q4 2025 decreased to 536.0 billion baht due to debt repayments and credit quality management, resulting in the NPL-to-total loan ratio dropping to 2.84%. Stage 2 loans also reduced to 7.07%, primarily from debt restructuring. Commercial banks continue to support borrowers, with 2025 performance declining mainly from reduced net interest income due to policy rate adjustments and support measures. Moving forward, the sector will need to monitor tight financial conditions and debt repayment capabilities for SMEs and households in a low-growth economic environment.