SET-listed Bangkok Commercial Asset Management (BAM) expects non-performing loans (NPLs) in the banking sector to increase next year, though the company will remain cautious with bad debt purchases given ongoing economic uncertainties.
BAM, Thailand's largest asset management company (AMC), allocated a budget of 9 billion baht for NPL acquisitions in 2025, consistent with its 2024 budget.
The company intends to be selective in acquiring bad assets amidst global economic uncertainties, partially influenced by the return of former US President Donald Trump.
Bundit Anantamongkol, chief executive of BAM, said the company will monitor Thailand's economic recovery and assess impacts from geopolitical risks, US-China tensions, and the nationalistic policies of Trump.
BAM plans to selectively acquire bad assets, with a focus on robust risk management, despite expectations for rising NPLs in the banking sector next year, said Mr Bundit.
He said in the latter half of this year, the company slowed its pace of NPL acquisitions in response to economic conditions.
BAM remains on track to meet its annual acquisition target of about 9 billion baht this year, said Mr Bundit.
"We must carefully select bad assets, focusing on their manageability in coming years," he said.
"Failing to do so could result in a greater burden over the long term."
Mr Bundit said the establishment of joint venture AMCs (JV-AMCs) is another factor influencing the company's choosy approach to purchasing bad debt.
BAM recently partnered with Government Savings Bank (GSB) to set up Ari-AMC, which manages the bad assets of the state-owned bank.
Over the past few months, GSB has transferred about 100,000 NPL accounts, including small business and credit card loans, to Ari-AMC, with plans to transfer an additional 400,000 accounts next year.
"NPL management under Ari-AMC has posted positive results. The JV-AMC primarily focuses on small borrowers who no longer have access to credit lines with GSB," he said.
"As a result, Ari-AMC aims to effectively ease the debt burden for this customer segment over the long term."
In addition, BAM is in the process of establishing Arun-AMC, in collaboration with Kasikornbank (KBank), pending approval from the Bank of Thailand.
KBank is expected to transfer bad assets, comprising secured loans in both the business and consumer segments, to Arun-AMC next year.
Meanwhile, Mr Bundit said BAM is undergoing a digital transformation across three core areas -- people, growth and efficiency -- aimed at enhancing service and business operations.
The company also introduced several debt restructuring programmes to help both business and individual clients better manage their debt.