Alpha Capital Partners Group (ACPG), a leading privately-owned asset management company (AMC) in Thailand, anticipates sales of non-performing loans (NPLs) to surge to 150-200 billion baht next year after the Bank of Thailand's debt aid measures expire.
NPL sales by financial institutions in 2021-22 were lower than normal because of the central bank's debt assistance measures during the pandemic.
After banks eased their debt assistance measures, NPL sales have been increasing, said Korakrit Khunruangrit, chief financial officer of ACPG.
In 2021 and 2022, NPL sales in the banking industry totalled 42.5 billion baht and 58.7 billion, respectively.
For the first half of 2023, total NPL sales in the banking industry tallied 139 billion baht, more than doubling from 56.7 billion in the same period last year, according to ACPG.
"An overwhelming amount of NPL sales occurred in the first half of this year," he said.
"We anticipate NPL supply for next year of 150-200 billion baht as the central bank's relief measures are due to expire later this year."
NPLs in the banking industry total roughly 800 billion baht, with commercial bank loans tallying 520 billion baht and loans from specialised financial institutions at 280 billion.
NPLs from commercial banks are expected to increase next year as more existing special mention (SM) loans, defined as loans overdue from 30 to 90 days, are projected to be classified as NPLs, said Mr Korakrit.
SM loans in the banking sector tallied 1.12 trillion baht in the first half of 2023, up from 1.11 trillion year-on-year.
He said the increasing NPL supply would provide greater opportunities for the company in 2024.
This year ACPG purchased total NPLs worth 1.2 billion baht, with total bad debt purchases for 2023 expected to register 1.5 billion, exceeding last year's total.
Chief executive and founder Michael Murphy Bequette said the company is also looking for investment opportunities to expand the portfolio of non-performing assets (NPAs) and to acquire other AMCs, based on promising opportunities in the segment.
Mergers and acquisitions (M&A) is part of the company's inorganic growth, he said.
The firm has experience in NPA management in Thailand for more than 15 years, dating to the Asian financial crisis in 1997.
The company has continued to expand its business via both organic and inorganic growth strategies, said Mr Bequette.
It changed its shareholder structure in 2019 and restructured the organisation by transforming ACPG into a holding company in 2021, he said.
The holding company model offers more flexibility for M&A as well as business expansion, said Mr Bequette.
The company's total assets under management tally 6.35 billion baht, covering both NPLs and NPAs.
ACPG plans to list on the Stock Exchange of Thailand to sustain its business growth in the long term, he said. The company holds 100% of shares in Alpha Capital Asset Management Co Ltd (ALPHA) and Wireless Asset Management Co Ltd (WAMC).