Bangkok:BAM is anticipating a significant increase in non-performing loans (NPLs) by 2027, and the company is preparing to purchase 20 billion baht worth of debt to address this issue.
According to Thai News Agency, BAM has unveiled a three-mission plan titled "Debt Resolution, Home Ownership, and Investment," which aims to transform the company from a manager of non-performing loans to a creator of economic and social opportunities. The company projects a worsening NPL situation due to an economic slowdown, with small and medium-sized enterprises (SMEs) at high risk of loan defaults. Current NPLs in the system total nearly 900 billion baht, while SME debt stands at 1.7 trillion baht.
BAM is setting a target to acquire an additional 15-20 billion baht in debt, with an investment budget of no more than 7 billion baht. The company plans to collaborate with financial institutions to establish an Asset Management Company (AMC). Dr. Rak Varakitphokathorn, BAM's CEO, highlighted the challenges faced by SMEs in adapting their business models, increasing their risk of becoming non-performing loans.
Currently, the financial system's NPLs amount to nearly 900 billion baht, with SME loans totaling approximately 1.7 trillion baht. With 98 asset management companies having a combined debt purchasing capacity of no more than 100 billion baht per year, there is a significant gap in managing the large volume of debt.
For the fiscal year 2026, BAM aims to acquire about 13 billion baht in debt, focusing on large corporate debt. By 2027, the company plans to purchase an additional 15-20 billion baht worth of debt, with a budget allocation of no more than 7 billion baht. There is no current need to issue additional bonds, as previous Social Bonds attracted high investor interest.
BAM is also preparing joint venture asset management companies with financial institutions and plans to submit the necessary documents to the Bank of Thailand. By 2026 and early 2027, BAM expects to have clarity on launching joint ventures with two large financial institutions and another major institution, resulting in five joint venture companies.
The company is enhancing its asset management business by launching products and services under three main missions Debt Resolution, Home Ownership, and Investment. These initiatives aim to provide debt restructuring opportunities, housing benefits, and investment mechanisms to increase market access and buyer confidence.
Additionally, BAM is focusing on compliance with the Bank of Thailand's regulations for scrutinizing large cash transactions and adhering to legislation that specifies payment deadlines for SMEs, aiming to improve liquidity and support debt restructuring efforts.