Government Savings Bank and BAM jointly invests Baht 1 billion in establishing ARI Asset Management Company Limited

Today (May 29, 2024) at Government Savings Bank’s Head Office, Mr. Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, Mr. Julapun Amornvivat and Mr. Paopoom Rojanasakul, Deputy Finance Ministers, co-chaired and witnessed the signing ceremony of ARI Asset Management Co., Ltd. or ARI-AMC joint venture which is established to solve debt problems in the financial institutions system. The joint venture is between Government Savings Bank and Bangkok Commercial Asset Management Public Company Limited or BAM.

Mr. Vitai Ratanakorn, President and CEO of Government Savings Bank, and Mr. Bundit Anantamongkol, CEO of Bangkok Commercial Asset Management Public Company Limited, signed the joint venture contract, along with Mr. Theeraj Athanavanich, Chairman of Government Savings Bank’s Board of Directors, and Mrs. Thongurai Limpiti, Chairman of Bangkok Commercial Asset Management Public Company Limited’s Board of Directors. Mr. Vitai Ratanakorn revealed that: “The problem of household debts in the country is a chronic problem that has been affecting the growth of the Thai economy for a long time, especially after the COVID-19 crisis when small entrepreneurs, SMEs, and a significant number of citizens experience a lack of liquidity, being unable to repay debts as usual which results in bad debts (NPLs). Concerning this, the government, under the leadership of Mr. Srettha Thavisin, Prime Minister, has a policy on helping citizens reduce their debt burden which covers debts across the system and has therefore assigned Government Savings Bank the task of establishing an asset management company in the form of a joint venture (JV AMC) to solve the problem of non-performing assets of debtors of specialized financial institutions (SFIs). This provides more flexibility in solving problems for debtors as some of SFIs’ non-performing debts can be transferred to established joint ventures which have specific expertise in debt management. The Government Savings Bank has thus joined with Bangkok Commercial Asset Management Public Company Limited or BAM to establish ARI Asset Management Company Limited or ARI-AMC which has the main objective of being a social business with profits generated at an appropriate level to help debtors, both NPLs and NPAs, allowing debt-restructuring or debt-negotiation process to take place. This gives debtors a chance to get out of having a bad credit history faster and return to the normal installment status, to settle their debts to be able to access loans in the system going forward, and to reduce their reliance on informal debts. All of this will benefit the overall economic situation to be stable and help reduce household debt problems for the country in a sustainable manner.”

The ARI Asset Management Company Limited is established with a registered capital of Baht 1 billion, with equal investment of 50 percent from both parties and an operating period of no more than 15 years from the date of commencement of operations. Its purpose is to operate the business of managing non-performing assets. In the first phase, debts will be purchased and transferred solely from the Government Savings Bank which consist of both secured and unsecured loans, including small-sized loans, SMEs, credit card debts, and cash cards of non-performing and doubtful status with outstanding amount not exceeding Baht 20 million. The transferred debts will cover debtors who have and have not yet been prosecuted with claimable rights according to law. The joint venture is to acquire debts at fair prices and take into account flexible and diverse benefits that debtors will receive in relation to their repayment ability, for example, the reduction in principal balance, interest rates, and various fees, or writing off part of debts for debtors, etc. It is expected that in the 3rd quarter of 2024, the joint venture will be able to start acquiring debts from the Government Savings Bank, and there will be more than 500,000 accounts of debtors receiving assistance, equivalent to over Baht 45,000 million of principal balance. In the future, the operation will be expanded to cover the acquisition of other types of debts as well as debts auctioned off by other SFIs under the supervision of the Ministry of Finance.

Mr. Bundit Anantamongkol, Chief Executive Officer of Bangkok Commercial Asset Management Public Company Limited or BAM said: “BAM plays a key role in solving the problem of non-performing debts in the financial institutions system and managing foreclosed properties over the past 25 years, resulting in debt settlement of more than 155,000 cases with a combined debt burden of more than Baht 480,000 million and in more than 52,000 foreclosed properties sold with appraisal value over Baht 122,000 million.”

Mr. Anantamongkol further stated: “From purchasing and transferring non-performing assets for management, BAM realizes that there are other approaches that can be used to effectively solve the NPLs and NPAs problems. This is the origin of the cooperation in establishing a joint venture between the Government Savings Bank and BAM today. The joint venture will be an asset management company established to solve the problem of public sector debts that have become bad debts since the spread of the COVID-19 virus in recent years. BAM will support the joint venture company by providing services regarding the management of distressed assets purchased and acquired by the joint venture from Government Savings Bank as well as providing information technology systems necessary for the business operations of the joint venture.”

Both organizations have a strong intention to implement the government’s policies to help solve the problem of bad debts in the financial institutions system. The parties will work together to plan the management of the joint venture and set guidelines for conducting businesses in various forms in the best possible way. Also, such collaboration will help reliable debtors overcome their debt problems smoothly. This will result in bad debts being resolved and turned into performing debts within the normal economic system and allow BAM to play a key role in reviving assets to drive the Thai economy and society sustainably according to the organization's vision.

Mr. Anantamongkol added: “BAM believes that we are ready in terms of experience and expertise of our personnel as well as information technology systems. We also can provide comprehensive customer services in all channels and have a network of branches throughout the country. These factors will facilitate this cooperation and drive it to success. In addition, they will enable ARI Asset Management Company Limited to respond to the responsibility of being a social business while managing the assets for reasonable returns, helping resolve household debt problems, and efficiently allocating available resources to support operations according to government’s missions and policies.”