Bangkok: The Bank of Thailand (BOT) is on the verge of announcing a new Joint Venture Asset Management Company (JV AMC) in the coming days, aimed at facilitating the purchase of bad debts. This initiative is part of a broader strategy to support the establishment of Asset Management Companies (AMCs) to address Thailand's non-performing loans (NPLs) and other financial challenges.
According to Thai News Agency, the BOT is expediting the finalization of measures to resolve debts below 100,000 baht per case, with the first phase expected to cover 2 million cases. An official announcement regarding this is anticipated within the next one to two weeks. Mr. Vitai Ratanakorn, Governor of the Bank of Thailand, highlighted the importance of asset management in managing the country's economic stability during his address at the first BAM SYMPOSIUM New Era of AMC 2025. He emphasized that household debt continues to exceed 86%, with nearly 4% classified as NPLs, 8-9% in default, and a combined debt ratio of 11-12%.
The BOT's strategy includes encouraging the establishment and increased activity of AMCs. Currently, about 90 AMCs exist, though only 45 are actively operational. Recent amendments to the announcement concerning the establishment of JV AMCs aim to enable these entities to purchase more NPLs, addressing specific systemic issues. The BOT also advocates for AMC membership in the Credit Bureau to streamline post-resolution loan application processes for debtors.
Mr. Vitai expressed the BOT's goals for AMC activity, stating, "We want to see more than half of the JV AMCs, or more than 45 of the 90, active. We want to see NPL purchases above 10% brought back to 20-25%, or even reach 30% of the NPL total. We want to see tangible solutions from AMCs."
The BOT is in talks with the Ministry of Finance and the Thai Bankers' Association to develop a project targeting debts up to 100,000 baht per person, affecting over 4 million individuals. If successful, the project could launch within one to two weeks, initially assisting the first 2 million debtors. This phase includes 700,000 NPLs at commercial banks, 800,000 NPLs at commercial banks to be purchased by Sukhumvit Asset Management (SAM), and 400,000-500,000 NPLs at state banks to be managed by Aree Asset Management (ARI AMC), a venture between the Government Savings Bank and Bangkok Commercial Asset Management Public Company Limited (BAM).