SAM to buy Bt20-bn NPLs from SME Bank
Sukhumvit Asset Management intends to buy about Bt20 billion worth of non-performing loans (NPLs) from the Small and Medium Enterprise Development Bank of Thailand (SME Bank), said SAM president Chookiat Jittimaitriakul.
SAM executives led by Chookiat last week met the new board of directors of SME Bank, which plans to release the NPLs to improve its financial performance. He said his company, which is a state enterprise, intended to buy them in terms of commercial assets rather than as part of government policy, and would base the purchase on the actual value of the assets.
“We have to wait and see the conditions [set by] SME Bank, possibly by the end of this year or early next year,” he said.
The company believes it can manage the NPL because it currently has Bt415 billion worth of NPLs and Bt22 billion worth of non-performing assets (NPAs) under management.
In total, SAM has the largest amount of assets under management of 30 firms in this business.
Bangkok Commercial Asset Management (BAM), another state asset-management enterprise, is expected to buy NPLs from SME Bank as well, he added.
BAM currently has Bt395.56 billion worth of NPLs and NPAs worth Bt35.90 billion under management.
Each year SAM plans to reduce outstanding assets under management by 5-6 per cent, meaning that the total outstanding will stay at around Bt400 billion per year.
The value of NPLs in Thai financial institutions excluding asset-management companies is estimated at Bt270 billion.
SAM this year projects revenue of Bt17 billion, up 10 per cent from last year. However, in the first half, revenue was below target because of the political unrest that affected the economy.
It is seeking strategies for releasing NPAs to buyers who have purchasing power but are waiting for the economy to improve.
The economic uncertainty in the first half had an impact on SAM’s plan for acquiring NPLs. This year it aims to acquire new NPLs worth Bt4 billion from private financial institutions.
Money generated from managing NPLs is forwarded to the Financial Institutions Development Fund (FIDF), which holds a 100-per-cent stake in SAM.
SAM has changed its vision towards a more commercially oriented policy from doing the government’s bidding in order to minimise losses for the FIDF.
The firm yesterday announced that it would host an annual conference for leading financial institutions, the “International Public AMC Forum in Asia” (IPAF 2014), from September 25-27.
Chookiat said this conference aimed to help solve economic problems and raise the standards of asset-management companies (AMCs) in the region.
