Opening the 25-year journey of BAM, revitalizing assets to become a digital organization
“BAM’s main mission is to be a tool for managing non-performing assets, an organization that helps customers and solves problems of financial institutions, helps rehabilitate the real estate business, and aims to be a leading organization in asset recovery to help drive the Thai economy and society to grow sustainably.”
The things that BAM adheres to for its success come from the 5 good policies: good for the country, good for society, good for customers, good for shareholders, and good for employees. In addition, it adheres to conducting business in accordance with the principles of good corporate governance, being responsible for society, the environment, and all stakeholders, including the fight against corruption and misconduct, in order to lead BAM to confidence, trust, and readiness to conduct business in accordance with the sustainable development guidelines (ESG) continuously in the future.
BAM debt settlement case study
Case 1
A customer in Prachuap Khiri Khan Province owned a sugarcane plantation that had bad debts and had 10 rai of land sold off for auction, but refused to move out. BAM found out the reason for not moving out because they had nowhere to go, so they suggested that BAM refrain from filing an eviction lawsuit. If they did, BAM would incur expenses and waste time before the court process could be completed. They suggested that they sell 1 rai of land to the customer and pay 300-400 baht per month as much as they could afford. In the end, the customer accepted the offer without any problems because they still had a place to live, while BAM did not have to waste money or time. They also got the customer to help take care of another 9 rai of sugarcane plantation. It was a win-win situation.
Case 2
The customer in Songkhla Province did not file an eviction lawsuit because from the condition of the house, it was a good house and had been taken care of. The customer had lived in this house for a long time. When analyzing the reason the customer did not pay the debt, it was because they were waiting for money from the sale of another plot of land. When it was sold, they would rush to pay BAM. Therefore, they invited them to negotiate the debt and signed a contract so that they could pay in installments first. The negotiations went well and they were able to pay in installments without having to pay in a lump sum.
Case 3
A customer in Bangkok province, BAM, got a condo from a bank auction and then sold it to BAM. The customer knew that the condo had been sold to BAM but did not know what to do. BAM advised him to pay in installments of 2,000-3,000 baht per month, with interest at MLR-3%. This is because BAM has the idea of taking care of customers or clients as if they were good clients. When he came to consult with BAM, this customer saw a concrete way to get the condo back and had the motivation to move on with his life.
Since April 2560 Tongurai Limpiti Has held the position Chairman of the Board of Directors, Bangkok Commercial Asset Management Company Limited (Public Company Limited) or BAM We are committed to moving forward with our vision to be a leading organization in asset recovery to help drive the Thai economy and society to sustainable growth, including being ready to be a monkey cheek to support bad debts from overflowing to financial institutions.
Thongurai said to "Bank Finance" That the things that BAM adheres to for its success come from the 5 good policies: good for the country, good for society, good for customers, good for shareholders, and good for employees. In addition, it adheres to conducting business in accordance with the principles of good corporate governance, being responsible for society, the environment, and all stakeholders, including the fight against corruption and misconduct, in order to lead BAM to confidence, trust, and readiness to conduct business in accordance with the sustainable development guidelines (ESG) continuously in the future.
BAM Route 25th Anniversary
With 3 major turning points
Thongurai said that the origin of its establishment must be traced back to 25 years ago. BAM was established after the Tom Yum Kung crisis, which affected all financial institutions in Thailand. This was reflected in the non-performing loans (NPLs) that rose to 50% of total loans of all financial institutions in the system, while the value of assets in the real estate market fell significantly. BAM was established as an asset management company to transfer bad debts of Bangkok Bank of Commerce (BBC), which had collapsed from the crisis, while good debts were transferred to Krung Thai Bank to be taken care of.
“At that time, BAM had the main mission to take care of BBC’s NPLs worth over 5.4 billion baht, with the main shareholder being the Financial Institutions Development Fund under the Bank of Thailand (BOT). But today, BAM has already managed all of BBC’s NPLs.”
After that, BAM purchased non-performing assets and assets awaiting sale from Phayathai Asset Management Company for management, which is considered the first purchase of non-performing assets and assets awaiting sale from another financial institution.
Therefore, the establishment of BAM is like setting the main mission to be a tool for managing non-performing assets, an organization that helps customers and solves the problem of bad debt of financial institutions, helps revive the real estate business by developing potential foreclosed assets into standard products that are increasingly in demand in the market, and is ready to manage debts from all financial institutions to be a professional organization in managing NPLs and NPAs.
“BAM is committed to being a leading organization in asset recovery to help drive the Thai economy and society to sustainable growth.”
Thongurai continued that after the establishment of BAM, there were three important events that were turning points and created significant developments for BAM:
1. Merger with Financial Institution Asset Management Corporation (FIMC) After the government had a policy to dissolve the Financial Institution Asset Management Corporation (FIMC), BAM purchased the main assets of the FIMC in accordance with the government policy, which consisted of non-performing assets and assets awaiting sale at a price of 27,300 billion baht, which complies with the Financial Institution Asset Management Corporation Dissolution Act B.E. 2549.
Including the voluntary transfer of employees of the BMA. This merger resulted in a stronger organization as it combined the potential of employees and work systems of both organizations.
2. Listing of BAM on the Stock Exchange of Thailand (SET) By converting from a limited company to a public limited company and changing the par value from 25.0 baht per share to 5.0 baht per share in 2558.
After that, BAM offered its common shares for the first time to the public (IPO) and registered the change in the company's paid-up capital with the Department of Business Development, resulting in a paid-up capital of 15,075 million baht. The Financial Institutions Development Fund (FIDF) reduced its shareholding from 99.99 percent to 45.79 percent, thus BAM became a fully private company. BAM's shares began trading on the Stock Exchange of Thailand under the abbreviation "BAM" on December 16, 2562.
3. Joint Venture (JV) This is an adjustment of AMC's business model by setting up a separate subsidiary, in which BAM is responsible for the investment, while the rest is received by the JV and shareholders. The JV will help honest customers smoothly overcome debt problems, which will result in bad debt being resolved and turned into good debt, returning to the normal economic system. This will enable BAM to play a key role in rehabilitating assets to drive the Thai economy and society sustainably, in line with the organization's vision.
“In making a JV, we are confident that we are ready in terms of experience and expertise of our personnel, as well as information technology systems, providing comprehensive customer service in all channels, and having a nationwide branch network, which will help the JV to drive the operations of the joint venture company to a successful conclusion.”
BAM has started a JV by joining with Government Savings Bank to establish Aree Asset Management Company Limited (ARI AMC), a joint venture asset management company (AV AMC) between Government Savings Bank and Bangkok Commercial Asset Management Public Company Limited (BAM) with an equal joint venture proportion of 50%, registered capital of 1,000 billion baht, and an operating period of no more than 15 years from the date of commencement of operations.
In the first phase, the debt will be purchased and transferred from only Government Savings Bank. This will be the purchase of general loans, both secured and unsecured, which are the groups of retail loan customers, SMEs, including credit card debt, cash cards with NPL status, including NPAs with debts not exceeding 20 million baht, covering customers who have not yet filed a lawsuit and customers who have already filed a lawsuit who still have the right to claim according to the law.
25 years, profit of more than 7.7 billion baht
Preparing to transform the organization into a BAM Digital Enterprise
Thongurai said that after BAM performed its duty in solving the problem of non-performing assets, even though it did not focus on maximum profit, BAM was able to generate continuous profits, with accumulated profits over 25 years totaling 77,593.33 million baht.
Meanwhile, BAM plays an important role, like a monkey cheek that helps absorb bad debts from flooding the financial institution system. Over the past 25 years, BAM has been able to help customers reach a conclusion from debt resolution in 155,683 cases, representing a principal debt burden of 484,649 million baht, and has been able to sell 52,258 assets, representing an appraised price of 122,866 million baht, which is an important part that makes the economic system sustainable.
Thongurai continued that in the next phase, BAM aims to transform the organization into a digital organization using DATA Driven. In the next 3-5 years, BAM has set the following goals and strategies:
1. Digital Enterprise In the next 3-5 years, BAM aims to become a fully Digital Enterprise by adjusting the work processes and core operating methods for NPL, NPA, LAW and financial accounting, including creating a database for use in business and maintaining the security of work systems and information.
2. Aiming to become an Asset Market Maker These include (1) Non-Bank Debt Management (NFD), (2) acting as a middleman in real estate buying and selling (Secured P2P Facilitator), and (3) expansion into ASEAN (Regional AMC Expansion).
Thongurai said that in addition, in order for BAM to keep up with the changes in the digital era, BAM has set the following operational guidelines:
1. BAM D Project (New Core System for NPL&NPA Management) BAM has driven the project, which will be the core of the organization's asset management system, the Collection Performance Dashboard system and the EIS Report system, which allow executives to monitor the performance of the asset development line at both the head office and the regions nationwide.
Executives can view real-time operational data for both NPL and NPA at the line, department, group and individual levels, which will help in overseeing operations and immediately resolving problems that have not yet reached targets.
2. BAM Data Center Project by BAM The information system has been developed to link various systems to serve as a central data center to be able to use all corporate data and reports from a single source. This will create a large data warehouse to become a data-driven organization as targeted. BAM emphasizes the use of statistical data and analytical data in comprehensive management, along with the use of innovation and technology in business operations.
3. Lead Management System It will help collect data from target groups interested in BAM's products and customers who want to know basic information to adjust their debts to contact or register, which creates opportunities to close sales or increase opportunities to adjust debts with customers. It is a system used to collect data from both debt restructuring customers and customers who purchase BAM assets.
4. Using AI to help analyze customers It enables the classification of different customer groups to find appropriate management approaches.
5. Integrating innovation and technology into the organization's management in a comprehensive manner This will lay an important foundation for BAM to grow sustainably in the future and not be disrupted by the various technological changes that are hitting the current world very well.
Ready to take care of every customer
Like a good customer
Thongurai said that in order for customers to have a chance to recover, BAM's role is to be a partner or consultant for customers, finding the best solution together. BAM will check to see how much cash flow or ability customers have to pay in installments, so that the debt restructuring plan can actually be done, while calculating interest rates.
It is a concession, including an extension of the debt repayment period, which will give customers an opportunity to return to business.
“Our role is to make our customers better. Therefore, we will take care of all of our customers as good customers of commercial banks. Customers that BAM has helped will be impressed that BAM is attentive in every step, treats them well, and provides both advice and encouragement so that they can return to their normal lives again, so that they no longer have to worry about debt problems.”
Follow and read other columns. Available in the September 2567 issue of Finance and Banking Journal. Issue 509 In digital format: https://goo.gl/U6OnIi
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