TTB to tackle household debt and promote ESG standards

Piti Tantakasem, Chief Executive of TMBThanachart Bank (ttb), insists that tackling high levels of household debt should be a priority on the national agenda. Piti made known that he is poised to tackle the issue, given his leading role within the household debt resolution team set up by the Thai Bankers’ Association (TBA).

Alongside the central bank and other pertinent parties, efforts are being made to introduce measures that will alleviate burgeoning domestic debt, reported Bangkok Post.

This follows the Bank of Thailand‘s decision to redefine its parameters for household debt, resulting in a surge to 16 trillion baht or equivalent to 90.6% of the country’s GDP. Essentially, the central bank now oversees almost 100% of the countrywide household debt due to this redefinition.

Piti is in favour of the central bank’s decision to redefine household debt. He believes it makes the issues much more visible, enabling better management procedures for debt. He also suggests legal amendments and public enlightenment as further steps towards managing the debt crisis efficiently.

He said…

“The public currently regards the NCB as a barrier, hindering borrowers’ access to loans.”

Piti mapped out how the NCB’s data increases rather than restricts access to credit. A proposed individual credit scoring system could further improve debt management, as the data would align better with a borrower’s risk profile.

Banks can also implement the individual credit scoring system for superior analysis of retail loans. This system would result in an interest rate based on the risk profile of each borrower, diverging from traditional methods where loan applicants were split into two categories – those who qualify for bank loans and those who do not.

Central to his strategy, Piti emphasised the importance of responsible lending, intending to implement new regulations to this effect later this year. Such measures seek to safeguard borrowers and help manage the country’s household debt more effectively in the coming years.

Although these responsible lending guidelines have not been implemented officially by the central bank, TMBThanachart Bank has already incorporated similar strategies. The bank integrated a debt consolidation programme that allows for improved customer debt management and reasonable pricing.

Echoing global movements towards corporate responsibility, Piti outlined TMBThanachart Bank’s efforts in promoting ESG (Environmental, Social, and Governance) standards.

Piti highlighted the loan and fundraising initiatives that TMBThanachart Bank extends to support business partners, customers, and social foundations. The bank aims to integrate ESG factors into its operations for sustainable growth, which includes products such as green bonds and loans with positive societal and environmental implications.

TMBThanachart Bank’s push for sustainable growth is coupled with the Thai market’s growing demand for electric vehicles (EVs). As Tantakasem mentioned, the bank is situated to be the market leader for EV loans, with a current portfolio totalling 6.5 billion baht.

Finally, with the Bank of Thailand’s recent launch of the first phase “Thailand Taxonomy” for sustainable economic activities, TMBThanachart Bank is primed for compliance. They have been following ESG principles since 2018 and are prepared to help customers and corporate clients to align their operations with the new environmental standards.

While large corporations are positioned to acclimate to these changes comfortably, Piti expressed some concerns on behalf of small and medium-sized enterprises. He stressed that some may face difficulties in complying with the new environmental requirements and classifications, particularly those in sectors with high greenhouse gas emissions.