BAM ramps up bad-asset buys

Bangkok Commercial Asset Management (BAM) expects its bad-asset purchases from financial institutions to reach 12-15 billion baht this year amid the sluggish economy.

The country’s largest asset management company has already purchased 10 billion baht worth of non-performing loans (NPLs) and non-performing assets (NPAs) since the start of the year, exceeding its full-year target of 8 billion baht, said president Somporn Moonsrikaew.

The higher bad-loan supply is expected to continue into next year, mainly because of the economic slowdown, and BAM could acquire a larger amount of bad assets for next year, Mr Somporn said.

Total bad assets under the company’s management amount to 108 billion baht, representing a 47.3% market share.

There are roughly 400 billion baht worth of NPLs in the country’s financial market, from which 50-60 billion baht is divested each year.

BAM acquires bad assets worth 10 billion baht a year on average.

At the end of March, the company’s portfolio comprised NPLs amounting to 74.5 billion baht and NPAs worth 21.7 billion baht.

BAM, which is 99.9% owned by the Bank of Thailand’s Financial Institutions Development Fund (FIDF), is set to go public by issuing up to 1.77 billion shares, accounting for 54.4% of total paid-up capital.

Of the total IPO shares, 280 million will be newly issued shares, 1.26 billion will be held by the central bank’s rescue fund and 230 million will be reserved for a greenshoe option.

The proceeds will be used for bad-asset acquisition to comply with BAM’s business expansion plan, and debt payment. The FIDF’s shareholding will be diluted to 45% after the initial public offering.

The share offering will not impact BAM’s credit rating, chairman Tongurai Limpiti said without revealing the IPO’s timing.