SME Bank on path to rehabilitation, plans Bt11-bn bad debt sales, assistance to firms

Salinee Wangtal, chairman of SME Bank, said next year’s new-loan target was set at Bt40 billion, while efforts would be made to reduce non-performing loans and restructure bad debts. 

Under the bank’s one-year rehabilitation plan, Bt11 billion worth of outstanding NPLs with collateral were opened for auction on November 21, with bidding to begin on January 15. 

About 10,000 borrowers whose non-collateral debts worth about Bt5 billion went bad through business shutdowns will be managed by private organisations. SME Bank is also joining forces with the Legal Execution Department, which will act as the intermediary for negotiations between the bank and its non-collateral small borrowers who received court rulings.

The bank will also speed up its negotiations with those running businesses with NPLs for debt restructuring. 

As of October, SME Bank’s NPLs dropped to 33.05 billion, or 38.89 per cent of total loans, compared with June’s Bt35.17 billion or 39.92 per cent of total loans.

Salinee said that with the bank’s Bt40-billion new-loan target, planned Bt11-billion NPL sell-off and refinancing, its outstanding loans were expected to end next year at Bt120 billion, up from this year’s estimated Bt90 billion.  

The bank has also set up a loan-monitoring unit to oversee loan quality nationwide, she said.

In the first 10 months of this year, SME Bank recorded Bt216 million in net profit, due mainly to increases in interest receivables after retail credit expansion and bad-debt restructuring. 

To continue its long-term business operations, the bank is now under organisational restructuring, with its front office going up from 44 per cent of total staff at the end of June to 60 per cent at the end of October.

SME Bank’s board also agreed to hire EY Corporate Services, a member firm of Ernst & Young Far East Area, to assess and improve the bank’s internal control system.