TMBThanachart Bank (ttb) expects roughly 50,000 auto loan customers to apply for the planned interest payment suspension scheme to ease their debt burdens.
Around 100,000 vehicles in the bank's auto loan portfolio qualify for the new debt restructuring scheme, with 50,000 owners expected to participate in the programme, said Thakorn Piyapan, president of ttb.
The Thai Bankers' Association (TBA) is preparing to roll out a debt restructuring scheme for mortgage, auto and small business loans.
The scheme is designed for vulnerable borrowers who are committed to repaying their debts, yet struggle to pay monthly instalments because of the uneven economic recovery.
Eligible auto loan borrowers can receive a maximum credit line of debt relief worth 700,000 baht per borrower.
For mortgages and small business loans, the maximum credit line for either category is 3 million baht per borrower.
Under the new scheme, banks suspend interest payments for eligible borrowers for up to three years, allowing them to pay only the principal on their loans.
Participants are prohibited from incurring new debt during this period.
If borrowers meet the conditions, the suspended interest is waived.
The TBA expects the new debt restructuring measures to be implemented at the beginning of next year.
As the country's sixth-largest lender by total assets, ttb has outstanding auto loans tallying 380 billion baht.
The bank is the market leader for new car loans and ranks second for used car loans.
Mr Thakorn said the scheme should help ease the debt burden of vulnerable clients, enabling them to manage their debt repayment as economic momentum improves next year.
"New car loans in the auto leasing industry have dropped by 30% year-to-date," he said.
"Given the glum outlook, ttb's auto loan portfolio is expected to decline by 10% this year, but we anticipate a recovery next year."
The bank's used car trading platform Roddonjai is an additional channel to drive auto loan growth. Launched last year, the digital platform received a positive response from both car owners and buyers, said Mr Thakorn.
He said ttb aims to provide used car loans for 40,000 vehicles sold on the platform this year, rising to 50,000 next year.
The bank is also in the process of acquiring a motorcycle loan portfolio from TLeasing Co, a subsidiary of MBK Plc, to complete its range of automotive loan services.