Dr. Rak sees 90 AMC Thailand as not a competitor but an ally, joining hands to fight 2 trillion baht in bad debt.

Dr. Rak points out that NPLs are flowing into AMCs to the tune of 2 trillion baht. He sees AMCs' primary mission as turning NPLs into good debt by establishing debt resolution factories and partnering with 90 AMCs in Thailand to bring debtors back into the system and help revitalize the economy over the long term.

28 Oct 2568 Dr. Rak Worakijpokathorn, Chief Executive Officer, Bangkok Commercial Asset Management Public Company Limited said in The 1st BAM SYMPOSIUM Seminar: New Era of AMC 2025 "Revitalizing Assets, Driving the Thai Economy" on the topic AMC and its role in asset revitalization 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.

The Thai economy has been affected by the global economic growth rate, which is below 3%. This is due to slowing exports and tariffs that have caused Chinese goods to flood into both the Thai and ASEAN markets, which are factors that have led to increased debt.

Although Thailand's household debt has decreased from 93-94% during the COVID-19 pandemic to approximately 86% of GDP, it remains higher than the ASEAN average of 63%. This figure does not include informal debt, reflecting our culture of creating debt today and then dying later.

In addition, the economic slowdown has caused a greater than normal flow of non-performing loans (NPLs) into the system. Currently, the total NPLs in the system are around 3%.

"Although the official NPL figure of 3% appears to be within our control, as we survived the Tom Yum Kung period when NPLs reached 38-42%, the NPL landscape is completely different from today. During the Tom Yum Kung period, only a few large NPLs could be managed by three AMCs. Today, there are over 5 million smaller NPLs distributed across 90 AMCs, making management complex."

In addition to NPLs, another important consideration is Specially Monitored Debt (SMD), which currently has a high volume. It is estimated that if debt relief measures are ended, half of this debt will become NPLs. If SM debt becomes NPLs sooner than expected, this will pose a challenge to Thailand's household debt management.

“What is particularly worrying is the rising number of SM debts that are turning into NPLs, because SM debt is like a grandfather on an ECMO machine. If it is removed, he will not survive.”

The current debt in AMCs is approximately 1 trillion baht, while there is also a pile of debt about 520,000 billion baht coming into AMCs from commercial banks and another 330,000 billion baht from state-owned specialized banks. If combined, this would amount to 2 trillion baht, which would impact the economic system.

"If these people can't recover or be reborn, they will be doomed to eternity in hell. That's why we need to find a way to transform NPLs into Reperforming Loans (RPLs) as quickly as possible."

Dr. Rak stated that the primary mission of AMCs is not to expedite legal proceedings or seize assets (NPA), but to transform bad debts into good ones, focusing on rehabilitating debtors so they can get back on their feet. This approach not only helps solve debt problems but also creates sustainability for the overall economic system, which can be achieved by:

1. Manage debt with the debt resolution factory model (TDR Factory Model) To be able to expand the ability to solve the massive debt flowing into the system, instead of the traditional first-in, first-out debt management method, because this type of debt management is no longer able to cope.

2. Create cooperation with all 90 AMCs. We should not view each other as competitors, but as partners (Complimentary) to create an infrastructure or ecosystem that will help solve a problem as large as 2 trillion baht.

"I want AMC members to be viewed not as competitors, but as partners who complement each other to help solve the 2 trillion baht NPL market. I believe each AMC can grow in their own unique way."

Large AMCs can acquire large debt portfolios and partner with smaller AMCs that specialize in managing some of the debt.

"Currently, AMCs have the capacity to acquire an average of approximately 100 billion baht in bad debt per year. If the inflow exceeds this amount, the capacity will be insufficient. AMCs need to adjust their engines to increase their capacity to 200-250 billion baht per year. If this is achieved, the 2 trillion baht debt will be completely resolved within six years."

3. The idea of ​​AMC being included in the credit bureau system To enable debtors who have entered the debt restructuring process and made regular repayments (becoming Re-Performing Loans – RPL) to rebuild their financial history and return to the normal credit system.

4. Creating a central platform for NPAs To consolidate Non-Performing Assets (NPA) from all AMCs in one place for easier access by developers and individual buyers.

Dr. Rak gave examples of management of both non-performing loans (NPL) and non-current assets (NPA) of BAM such as:

1. Public Asset Project This project is designed to address the challenges faced by individual buyers and self-employed individuals who have been denied loans by banks, by enabling them to purchase properties directly from AMCs' NPA portfolios.
2. Collaboration with Developer In a situation where the Developer is unable to borrow money to invest in new projects, AMC can offer NPAs in the portfolio as an alternative, allowing the Developer to purchase and develop them immediately, thus reducing risk and increasing liquidity in the market.
3. Financial Advisory Center (FA Center) In addition to acting as a debt doctor, BAM has also established a financial advisory center to assist debtors in restructuring their businesses and securing new funding sources from lenders with good governance. This will help AMCs receive full repayment of their debts and allow debtors to return to their feet with dignity.

"The work of AMCs in this era is not just about profit-making businesses. If all AMCs work together and create synergy, no one is a competitor, I believe Thailand still has hope. We can help people recover and reintegrate into the economy, which will benefit the nation in the long run."

Slides accompanying the lecture on the topic of AMC and its role in revitalizing assets driving the Thai economy by Dr. Rak Worakitphokatorn

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