SERVICING DEBT
JMT predicts more bad loans
More mortgage and auto loans are likely to turn into distressed assets due to rising interest rates and oil prices, according to a debt-collecting agency.
"The impact of interest-rate and oil-price hikes will reduce the debt-servicing ability of homebuyers and car buyers. So, the bad loans of these borrowers are expected to increase," Piya Pong-a-cha, director of JMT Network Service Co Ltd, said yesterday.The debt-collection and debt-management company, a wholly owned unit of serve mobile phone accessories distributor Jay Mart Ltd's leasing operation, has expanded into debt-collecting for other companies. JMT expects to grow its loan portfolio to Bt13 billion by the end of the year after buying more distressed debts from financial institutions. That's compared with Bt5 billion at the end of last year. The increase would come not only from new bad loans but also loans that turned sour again over the past two years. The company now manages loans of Bt11 billion from 800,000 debtors. Most of the loans were bought from financial institutions. Home, credit-card and personal loans account for 59 per cent of the company's loan portfolio. Automobile loans account for 28 per cent, followed by mobile-phone loans, 11 per cent. Other loans make up the rest of its book. JMT aims to increase the amount of consumer loans under its management this year to Bt600 million-Bt700 million. With management fees averaging 25 per cent, these assets would be worth Bt150 million-Bt175 million to the company. JMT's debt-recovery rate is about 25 per cent. The firm is in discussions with Kasikornbank, GE Capital and Capital OK about buying their loans, mainly credit-card and personal loans. The company needs about Bt500 million to fund its expansion this year, and plans to list on the Stock Exchange of Thailand in a couple of years to raise more capital for future expansion. Somruedi BanchongduangThe Nation
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