BoT uneasy over corporate debt repayment capacity

The Bank of Thailand has voiced concerns about the debt repayment capacity of domestic corporations carrying heavy debt burdens amid economic headwinds.

- SOMRUEDI BANCHONGDUANG

According to the central bank's 2024 Thailand Financial Stability Assessment, certain large domestic corporations, classified as highly leveraged large corporations (HLLCs), have accumulated hefty debt levels compared with their peers, despite the overall financial health of large corporations remaining robust.

The potential impacts from increased US tariffs on Thai exports could affect the economy and weaken lender and investor confidence in the business sector, noted the central bank.

Although creditors and investors remain confident in HLLCs' repayment abilities due to their generally strong performance, the increasing leverage in this segment warrants close monitoring, even as short-term risks to financial stability remain limited.