Banks remain interested in setting up joint venture asset management companies (JV-AMCs) as an option to manage their non-performing loans (NPLs).
TMBThanachart Bank (ttb) chief executive Piti Tantakasem said the bank is discussing the formation of a JV-AMC with some potential partners.
The bank did not set a time frame for a decision on the venture, he said.
For bad debt collection, ttb classifies NPL customers into three groups based on their customer profiles.
The bank manages its NPL clients that are willing to collaborate on debt restructuring directly, said Mr Piti.
However, the bank does not possess a great deal of expertise in terms of debt collection for some loan segments and plans to sell this debt to AMCs to save on operating costs, he said.
For NPL clients unwilling to enter debt restructuring, the bank also plans to sell these debts, said Mr Piti.
He said a JV-AMC could be an option for NPL management, especially in some loan areas in which the bank has less expertise than AMCs. One such area is digital loans.
Digital lending still requires staff to collect debts, resulting in higher operating costs, said Mr Piti.
He said the bank wants to develop a digital loan service available solely on the digital platform. Currently its digital loan service is available via a mix of both offline and online channels.
For the solely digital service, ttb plans to use alternative data and prudent risk management when assessing loan applications to control NPLs, said Mr Piti.
Krungthai Bank president Payong Srivanich said the bank is studying the feasibility of establishing a JV-AMC as a new model to manage NPLs.
The bank has been talking with several AMCs about a possible collaboration, but nothing has been finalised, said Mr Payong.
While the bank could manage NPLs by itself, a JV-AMC could strengthen the bank's efficiency in bad debt collection given an experienced AMC partner, he said.
Kris Chantanotoke, chief executive of Siam Commercial Bank, said the bank has been studying the possibility of forming a JV-AMC and has been in talks with potential partners.
Even though the bank is capable of managing the NPLs by itself, it wants to explore other opportunities and options pertaining to the management of bad debt, he said.
If there are other instruments or business models that could improve the efficiency of NPL management, the bank is ready to study such models, said Mr Kris.
The Bank of Thailand introduced JV-AMC business licences in 2022. Only JK Asset Management (JK AMC), a joint venture between Kasikornbank and JMT Network Services, applied for a licence.
The venture has been operating since last year.
Central bank assistant governor Suwannee Jatsadasak said while no other financial institutions have applied for licences, several banks and AMCs have shown interest in the concept and discussed licensing with the central bank.