ARI-AMC, a joint venture between Government Savings Bank (GSB) and Bangkok Commercial Asset Management Plc (BAM), looks set to transfer non-performing loans (NPLs) from the bank worth 30 billion baht for management.
According to GSB president Vitai Ratanakorn, within this month the bank is scheduled to transfer NPLs amounting to 30 billion baht, covering 140,000 debtor accounts, to ARI-AMC for management.
The bank will continue to gradually transfer additional NPLs to ARI-AMC, with the goal of transferring 400,000 to 500,000 debtor accounts by early next year.
These retail debtors have average loan amounts ranging from 50,000 to 70,000 baht per account, with up to 20 million baht per account.
Mr Vitai said once the non-performing assets (NPAs) are transferred to ARI-AMC, the company will start contacting debtors to facilitate debt restructuring, which will include reducing both principal and interest to make the debt more manageable.
He said ARI-AMC's business operations will not be highly profitable as the aim is to assist these debtors as much as possible, with an estimated profit margin of no more than 10%.
ARI-AMC was established in May as a 50% joint venture between GSB and BAM, with registered capital of 1 billion baht.
The operational period is scheduled to not exceed 15 years from the commencement date.
Initially ARI-AMC will purchase and transfer debt solely from GSB, focusing on both secured and unsecured general loans, including retail loans, small and medium-sized enterprise loans, credit card debt and cash card debt classified as NPLs and bad debts, as well as NPAs not exceeding 20 million baht.
This group can include debtors who are not yet subject to legal action as well as those who are, but still hold legal claims.
The company will purchase debts at fair prices, taking into account the benefits to the debtors in line with their ability to repay, said Mr Vitai.
He said there will be flexibility and variety, such as reducing principal, lowering interest rates and fees, or writing off some debt.