Overall non-performing assets (NPAs) in the industry are about Bt180 billion, excluding those of the state-owned Asset Management Corp.

Currently, BAM has Bt38 billion worth of NPAs under management. The new NPAs to be transferred will boost its total to about Bt100 billion.

According to Bank of Thailand regulations, each bank is forced to speed up restructuring of its bad debts. Otherwise, the value of the collateral pledged to their non-performing loans, which need restructuring, would decline. This would force banks to set aside more loan-loss reserves.

Banks must therefore speed up debt-restructuring measures, which include selling NPAs to asset-management entities such as BAM.

In order to unload the NPA portfolio, the Thai Bankers Association - the intermediary between the banks and BAM - has talked to BAM and so far the requirements of both parties match.

"There's a little problem about the standard measurement for asset classification. We have to agree what assets should be categorised in which class for the sake of value appraisal," said Banyong.

"Each of us will bring the issue to discuss with the board of directors. I'll talk to my board at the end of this month. Then we may have another meeting to reach a conclusion."

According to Banyong, the price of new houses rose 25 per cent between 2003 and the first quarter of this year.

In order to attract more

customers to purchase BAM's new properties, the company is to launch a marketing campaign in the next couple of months offering a brand quality guarantee called BAM Premium Property.

"We have many types of assets, from not good to very poor, so we cannot guarantee every single asset that we have. The initial idea is that we will offer some special offers for the assets that we offer guarantees on," said Banyong.

Banyong said his company's sales volume per month had jumped from Bt200 million last year to around Bt300 million this year.

High oil prices and higher interest rates are some of the

factors giving cause for concern, but Banyong said there was still some liquidity around for selling small assets.

He added that the company had generated Bt4 billion in sales in the first five months of the year. However, this was down 20 per cent when considering the target of Bt12.65 billion for the whole year.

Piyarat Setthasiriphaiboon

The Nation