J Asset Management (JAM), the asset-management subsidiary of JMT Network Services (JMT), has purchased hire-purchase bad debt worth Bt3.26 billion from Siam Commercial Bank.
JMT chief executive officer Piya Pong-acha said the political uncertainty had left many financial institutions unwilling to bear risks, leading them to sell bad debt since early this year.
In the first two months, JMT purchased Bt4.14 billion worth of non-performing assets from financial institutions.
The company is selecting certain portfolios to manage, seeing an opportunity to gain high returns from many segments, especially auto and motorcycle hire-purchase loans and personal loans, Piya said.
“Since the beginning of the year, we have continually purchased portfolios for management, reflecting the trust that banks and financial institutions have in our capabilities.
“The latest [hire-purchase] portfolio is large compared with previous deals,” he said.
As of end-2013, personal loans accounted for 56 per cent of assets managed by JAM, followed by motorcycle and auto hire-purchase loans (41 per cent) and credit-card debt (3 per cent).
Piya said that previously, personal loans accounted for most of the bad debt purchased by the firm. Since the end of last year, however, bad debt from hire-purchase loans has flowed into its portfolio.
The company believes this trend stems from the government’s first-car scheme.
The trend of bad debt in the auto-loan sector provides growth opportunities for JMT, the executive said, adding that the company expects to achieve high profits by being selective about debt quality.
“The purchase of non-performing hire-purchase loans will help support the growth of JMT,” he said, adding that the company will consider buying bad debt based on its potential profitability and the quality of the debt.
JMT this year targets Bt13 billion of bad-debt purchases.
It currently has assets under management of Bt31 billion. It expects to see net profit grow 80 per cent this year, from Bt75.08 million in 2013.
JMT’s stock price yesterday closed at Bt12, unchanged from last Friday.