BANGKOK (Aug 18): Thai banks' non-performing loans stood at 2.82% of outstanding loans 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 on Tuesday.

Bank lending rose 2.0% in the second quarter of 2026 from a year earlier, following a 0.2% annual rise in the previous quarter, the Bank of Thailand said in a statement.

 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 growing in the third quarter, driven by demand from large firms for working capital and for raw materials, BOT senior director Suchot Piamchol told a briefing.

NPLs 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 (US$496 billion or RM2 trillion) at the end of March, or 85.9% of GDP, among the highest levels in Asia.

Southeast Asia's second-largest economy expanded by 1.9% in the second quarter from a year earlier, down from 2.8% in the first quarter.

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