BANGKOK Commercial Asset Management (BAM), the state-owned debt-management firm, has budgeted more than Bt10 billion this year to buy bad debts from banks. BAM's net profits have grown by 11-12 per cent a year on average, except last year, when its net s
Last year, BAM’s revenue increased 121 per cent to Bt16.6 billion, of which Bt8.5 billion was from rehabilitating its customers’ debts and the rest from selling non-performing assets (NPAs).
Somporn Moonsrikaew, senior executive vice president of BAM, said that of the total 2014 budget, Bt6 billion to Bt7 billion was set to buy non-performing loans (NPLs) and NPAs from Siam Commercial Bank, Krungthai Bank and the Government Housing Bank. The deals are expected to be completed by midyear, he said.
The company last month purchased unsecured loans worth Bt10 million from Thanachart Bank as it wanted to expand its business lines and examine its ability to manage new assets, he said.
BAM president Krit Sesavej said it was determined to increase the value of its NPA and NPL holdings to Bt21.50 billion this year from Bt20.11 billion in 2013.
He said the challenge for BAM was the reduction of NPLs in the banking system, as the banks are well able to control their bad debts and choose to restructure debt instead of allow their assets to go bad.
“When the NPLs in the banking system are low, we have to buy assets at a competitive price to maintain out profitability. Furthermore, we will speed up conversion of Bt100 billion worth of NPLs under management to NPAs, in order to get cash,” he added.
The value of NPLs in commercial and foreign banks in Thailand as of the end of last year was Bt265.65 billion. That was up from Bt254.21 billion in 2012, but the ratio improved to 2.15 per cent from 2.25 per cent.
The value of NPAs in 2013 stood at Bt79.14 billion, compared with Bt91.40 billion in the previous year.
Krit said BAM planned to mobilise Bt2 billion to Bt3 billion to back its purchase of assets, for which a debenture issuance is one option.
However, a decision on that would depend on many conditions, such as if financial performance in the first half is below target, he said.