THE ECONOMIC FACTORS AFFECTING TO NON-PERFORMING LOANS (NPLS) OF THE THAI COMMERCIAL BANKS

Abstract

The objectives of this study were to examine the economic factors that affect to non-performing loans (NPLs) of the Thai commercial banks and the bank can be used a signal from economic factors for control and decrease a risk that increase the number of non-performing loans. A sample was selected from non-performing loans of the Thai commercial banks during the fourth quarter of 2002 – the third quarter of 2017 with the total of 60 quarters. In this study, the economic factors are inflation, gross domestic product, minimum loan rate, gold price, and business sentiment index. The multiple regression analysis by ordinary least square method (OLS) was used for data analysis.

The findings indicated that percentage change of minimum loan rate factor is the only one which negatively correlated with the percentage change of the number of non-performing loans of the Thai commercial banks at a statistically significant reliability level of 95 percentage.