Thai banks set for slower profit growth as consumers struggle to repay loans

BANGKOK: An unexpected spike in bad loans at Thailand's banks in the latest quarter is set to crimp earnings growth in the sector, the latest symptom of a household debt malaise that also threatens consumer spending in Southeast Asia's second-largest economy.

Thailand's consumers are struggling to repay loans taken out on cars, homes and electronics amid easy credit and government stimulus measures in the three years to 2013 - splurging that has pushed the country's household debt to a record 85.9% of GDP.