The Bank of Thailand Governor points out that AMCs are an important piece of the puzzle, accelerating their expansion into NPL absorption to combat household debt problems.

BoT Governor Vitai points out that AMCs are a key piece of the puzzle in combating household debt, urging him to expand his role in absorbing NPLs. He is preparing to open the way for the establishment of additional AMC joint ventures this week.

Mr. Vitai Ratanakorn, Governor of the Bank of Thailand (BOT) Opening remarks at the seminar BAM SYMPOSIUM 1: New Era of AMC 2025 "Revitalizing Assets, Driving the Thai Economy" Organized by Bangkok Commercial Asset Management Public Company Limited On October 28, 2568 at the Napalai Grand Ballroom, Dusit Thani Hotel, Bangkok

"Since assuming the position of Governor of the Bank of Thailand on October 1st, I haven't taken on any speaking engagements. This is my first, as I intend to focus on impact-generating work. BAM and the Bank of Thailand share a close relationship, and it's an honor for both me and for myself."

Mr. Witai stated that the overall Thai economy, as is widely known, may not be as good as it once was. Gross Domestic Product (GDP) grew by 3% in the first half of the year, still good compared to the beginning of the year and due to front-loaded exports.

However, the second half of the year may see a slight slowdown. The BoT's overall GDP forecast for 2568 is estimated at around 2.2%, with a slowdown beginning in Q3 and Q4, and then beginning to improve in Q1 2569.

In 2569, growth is expected to decrease to 1.6%, due to the country's real structural problems, including the aging society, political instability, financial inequality, corporate governance (CG) issues, education issues, and many other issues.

“Another truly significant and structural problem, if we can't overcome or address it, will undoubtedly continue to be a problem for economic growth and the well-being of our people. That is household debt.”

Household debt is high, having risen to over 90% of GDP and now stands at nearly 87% of GDP, falling to just over 86%. This decline is attributed to GDP growth, which is attributed to slower debt growth. Household debt has a negative impact on the country's purchasing power, or demand, amid weak purchasing power and a lack of increased investment.

But in household debt, 86% has an interesting part. คือ Starting to have problems with late payments Both the portion that is already in bad debt (NPL), which is approximately 4%, or the portion that has started to default on payments, called debt overdue for no more than 3 months (SM), which is approximately 8-9%, together totaling approximately 11-12%, which is a very important portion because it reflects the NPL problem or the problem that is about to lead to bad debt.

Therefore, it's not just a matter of pressure on consumption and investment, but also a matter of people's livelihoods, the well-being, and the business capabilities of small and medium-sized enterprises (SMEs). If this issue isn't addressed seriously and quickly, there's a chance the debt-to-GDP ratio will rise.

“The problem is how to do it, and who will do it? We live in an era where results are the focus, not analysis.”

Mr. Witai added that in addressing structural household debt, or NPLs, asset management companies (AMCs) play a significant role. There are approximately 90 AMCs nationwide, and of these 90, approximately 45 are active or have transferred assets and are currently operating.

AMCs play a role in absorbing NPLs. When NPLs occur, AMCs can purchase NPLs and use their capabilities to restructure or collect payments at more lenient rates than when they were in financial institutions. They offer lenient interest reductions, no interest charges, no fees, and no need to pay the full amount. This allows bad debt to turn into good debt more quickly.

As for its absorption role, AMCs were once able to absorb up to approximately 20% of NPLs that year, but have now decreased to approximately 10%. Therefore, what we would like to see in the future is a greater role for AMCs, as they are a key piece of the puzzle that will solve the problem of debt after loans are issued. They can also help solve household debt problems.

However, the BoT wants to see AMCs expand and see them established and operating more actively than at present. The Bank of Thailand is about to announce the JV-AMC (Joint Investment in Establishing an Asset Management Company) for financial institutions to jointly invest in establishing a JV-AMC with their existing AMC.

"This announcement has been expiring since 2567, and within the next 2-3 days, the Bank of Thailand will issue this announcement. We hope to establish a JV-AMC to help individuals and SMEs in need. We'd like to see the number of active AMCs increase to more than half, or approximately 45 out of 90. We'd like to see the absorption of NPL purchases exceeding 10% return to 20-25% or 30% of the total NPLs."

Mr. Witai said the BoT is eager to see concrete solutions from AMCs and is confident that BAM, as the market leader, will play a significant role.

BAM has a market share of approximately 45% of the total market, and Sukhumvit Asset Management (SAM), another subsidiary of the Financial Institutions Development Fund (FIDF), has a market share of approximately 15% of the total market.

"I believe AMCs will negotiate more leniently if they generate appropriate profits for shareholders. This will also help society, the people, and the remaining SMEs. By reducing debt, household debt will be addressed. Furthermore, businesses will also be able to generate appropriate profits. This will lead to true sustainability."

Furthermore, we would like to see AMCs voluntarily enter the National Credit Bureau (NCB) system, not forcefully. If all AMCs enter the credit bureau, the database will be clearer. Once debt resolution is achieved, debtors can re-enter the economic system and continue to drive the economy forward.

“This is what AMC wants to see all the way through, and I truly believe that BAM will be a key force in moving this puzzle forward.”

Mr. Witai added that in addition, The Bank of Thailand (BOT) is collaborating with the Ministry of Finance and the Thai Bankers' Association to push for the AMC, which would resolve public debts of up to 100,000 baht. This is another issue we'd like to see realized. We hope discussions will reach a conclusion within this week or next week, and we hope it will be successful.

This will transfer debts under 100,000 baht into debt resolution, which is expected to help approximately 1.5 to 2 million debtors. Most of them will go to SAM, while others may be considered by BAM.

"If successful, SAM will be transformed into a social AMC under the Bank of Thailand, a social AMC. BAM will be an AMC that helps people and also serves business shareholders. This is something we're trying to create impact on. Negotiations on this matter will conclude within one to two weeks. We hope to help an additional 2 million people. This is a truly collaborative effort between the Ministry of Finance, the Bank of Thailand, and the Thai Bankers Association."

BAM holds historic AMC seminar, BAM SYMPOSIUM: New Era of AMC 2025, the biggest stage of the year for asset management business.