SAM arranging debt collection unit

Sukhumvit Asset Management (SAM), a wholly owned bad-asset management firm under the Financial Institutions Development Fund, is seeking central bank approval to dip its toes into debt collection service for consumer loans.

The Bank of Thailand is in the process of setting up criteria for SAM’s tentative business, expected to be completed in May, while SAM forms a new operational unit for debt collection services with a focus on credit card and personal loans, said Niyot Masavisut, SAM’s senior executive vice-president and acting president.

The debt collection business is in line with central bank policy to bring down the country’s household debt-to-GDP ratio from around 80% at present.

Even though SAM is set to expand its business, it does not need to recruit additional staff and has no plans to expand its network from the four branches in Chiang Mai, Phitsanulok, Khon Kaen and Surat Thani provinces, Mr Niyot said.

SAM will adopt technology to leverage the new business towards a digital platform.

He said SAM targets purchasing 5 billion baht worth of distressed assets from financial institutions this year, having already purchased assets worth 1 billion in the first quarter.

The purchased assets consist of both non-performing loans (NPLs) and non-performing assets (NPAs), the bulk of them mortgage and small and medium-sized enterprise loans bought from Siam Commercial Bank and CIMB Thai Bank.

The company’s planned purchase of an additional 4 billion baht of bad assets is expected to be completed by the third quarter, Mr Niyot said.

He forecasts the Thai banking industry will put 70 billion baht worth of bad assets on sale this year, similar to last year’s levels.

Amid intense competition in the 40-player bad-asset management sector, SAM believes its asset purchases of 5-6 billion baht a year are appropriate for the company’s annual income and funding.

SAM aims to generate 10.26 billion baht in income this year, of which 6.30 billion will come from NPL restructuring and the remaining 3.96 billion from NPA sales.

For the first three months to March, the company’s income totalled 1.45 billion baht. Moreover, SAM managed to restructure NPLs worth 8.68 billion baht and divest 976 million from NPA sales during the first quarter.

SAM’s NPLs under management tallied 360 billion baht from 19,141 accounts, while NPAs were worth 22 billion baht from 3,801 items.

The company contributed 8 billion baht in income to the rescue fund last year, surpassing its target of 7 billion.

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