Business

Bank of Thailand Seeks to Reduce Record High Household Debt

The Bank of Thailand is considering four measures to reduce Thailand’s household debt to about 80% of gross domestic product (GDP), down from the current 90.7%.

Ronadol Numnonda, deputy governor for financial institution stability at the Bank of Thailand, ascribed the surge in public debt to a succession of crises in recent years, notably the COVID-19 pandemic, which have pushed many people and businesses farther into debt.

He stated that the first policy, which will go into effect in January, is responsible lending, which requires financial institutions to be more cautious and responsible when granting loans, taking into account the borrower’s existing household debt.

The next issue to be addressed is chronic indebtedness, which means that borrowers are only capable of repaying the interest and not the principal, implying that they are unable to properly settle their debts, according to Ronadol, who added that many creditors fall into this group.

Addressing this issue, he said, must begin with personal loans, with debtors having access to financial institutions so they can settle their personal loans within five years through refinancing, with a maximum interest rate of 15%, adding that this measure should be implemented in April.

The other solution is risk-based pricing (RBP), which allows debtors to obtain fresh finance at lower interest rates in order to settle their past debts.

Thailand’s household debt level at its highest in 15 years

The economic consequences of the COVID-19 outbreak meant that many Thais were unable to survive on their usual salary. Household debt in Thailand has been increasing as people have turned to borrowing to pay daily needs, with the amount increasing by 11.5% this year. The average household is now more than 500,000 baht in debt, which is the highest level in 15 years.

Thanavath Phonvichai, President of the University of the Thai Chamber of Commerce (UTCC), disclosed the findings of his university’s survey on the state of Thailand’s family debt in 2023.

The survey, conducted by the university’s Centre for Economic and Business Forecasting (CEBF) and including 1,300 respondents, discovered that household debt had been rising since the trade war between the United States and China. The COVID-19 problem aggravated the household debt position by causing the economy to stagnate and affecting employment and income levels.

Dr. Thanavath went on to say that many people had to borrow money to make ends meet, and that Gen Y and Gen Z were increasingly spending money before they earned it without proper planning. People’s debt burdens have escalated since income levels and the wider economy have not recovered as quickly as projected.

Household debts have increased by 11.5% this year, with the average Thai household now owing 559,408 baht. Formal lending accounts for 80.2% of total debt, while informal lending accounts for 19.8%.

Thai People Struggling Under a Mountain of Household Debt

According to Dr. Thanavath, who also serves as the CEBF’s main advisor, household debt will reach a peak next year. This is due to the fact that economic conditions for the later half of 2023 remain uncertain, which means that people will still not have enough money to pay off debts, and some will have to borrow more money.

He claims that the Thai economy is growing in a K-shaped pattern, which means that not all sectors of the economy are rising at the same rate. He explained that in the past, when exports were high, the tourism industry suffered greatly.

Exports have fallen as the tourism industry begins to recover. He said that the global economic slowdown is impeding Thailand’s recovery, and that delays in forming the new administration will harm trust, causing even greater economic pressure.

Nonetheless, the UTCC president believes that household debt will fall to 80% of GDP within five years. He went on to say that the general economic situation appears to be improving, and that households will not incur further debt in such conditions.

Households have also become more indebted to formal lenders rather than non-formal lenders. As a result of these developments, Dr. Thanavath believes that the home debt problem will become a human one rather than an economic one.

Dr. Thanavath proposed long-term solutions to the household debt problem, such as low-interest loan sources, debt management education, promoting personal expense management, and having financial institutions raise their borrowing criteria to prevent people from incurring additional debt.

Tags: thailand news

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP