Four major banks delay sale of non-performing loans

[webfact]

Four major banks delay sale of non-performing loans

By The Nation

 

 

Four major Thai banks say they will focus on managing their asset quality instead of dumping non-performing loans under unfavourable market conditions.

 

Payong Srivanich, president of Krungthai Bank, said KTB’s priority was to maintain asset quality and look after debtors. He expects the bank’s non-performing loans to remain flat at the 4.21 per cent of total loans registered in the third quarter.

 

He said KTB regularly sells its non-performing asset (NPAs) as part of debt management measures, but the large volume now being sold made the market unfavourable.

 

“If we can’t get good prices for our NPAs, we will not sell them,” he said.

 

The bank is also cutting its exposure to concentrated risks. For example, it is reducing the proportion of total industrial loans to the rice sector from 60 per cent, and has cut lending to cooperatives from Bt70 billion to Bt30 billion, all of which must be backed by collateral.

 

Kasikornbank CEO Kattiya Indaravijaya said it, too, was choosing to manage bad debts rather than sell them on. The bank is supporting customers by restructuring their loan conditions to manage bad debt. 

 

“We are confident that we can manage bad debts better than in the past when we usually chose to sell them on,” said Kattiya.

 

Deja Tulananda, chairman of Bangkok Bank’s board of executive directors, said its priority was to preserve asset quality rather than sell bad debt. By doing so, the bank could cover loans and also benefit borrowers, he assured.

 

“We remain focused on debt management and, under the central bank’s supporting policy, we are confident that we can take better care of our debtors and prevent bad debt from rising,” he said.

 

Piti Tantakasem, CEO at TMB Bank, said the bank will maintain its push for provisions against risk assets begun in the third quarter. Currently, NPLs were not high, accounting for just 2.3-2.4 per cent of total loans and should not exceed 3 per cent by the end of this year, he said.

 

The bank will delay selling NPAs this year in order to avoid flooding the market, he added.

 

Source: https://www.nationthailand.com/business/30399542

 

 

-- © Copyright The Nation Thailand 2020-12-14

 

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[edwinchester]

Nothing to do with nobody wanting to buy the junk then?

[klauskunkel]

7 hours ago, webfact said:

Payong Srivanich, president of Krungthai Bank, said KTB’s priority was to maintain asset quality and look after debtors.

A banker's priority? Bah humbug.

Edited December 14, 2020 by klauskunkel

[wolf81]

1 hour ago, edwinchester said:

Nothing to do with nobody wanting to buy the junk then?

 

Seems that got everything to do, since as written in the article:

 

 

Quote

“If we can’t get good prices for our NPAs, we will not sell them,” [Payong Srivanich, president of Krungthai Bank] said.

 

Edited December 14, 2020 by wolf81

[Venom]

So, they confiscate the property and then just sit on it until it's favorable to sell to their friends, family and/or the well connected. No hurry they are still holding properties leftover from the 1998 economic meltdown. ????

[Cake Monster]

6 hours ago, edwinchester said:

Nothing to do with nobody wanting to buy the junk then?

Some of the NPA will be very good asset.

However, Buyers will not buy these assets or others while the Covid situation is in Flux, and there is a also a lot of Political uncertainty.

Also the main buyers of NPA, such as BAM, will be waiting for the Banks to have such a Stock of NPA,  that they will be forced to sell, at a greatly reduced price in order to remain Fluid.

It is only a matter of time before the NPL rate reaches levels that the Banks cannot handle and will be forced to sell NPA

[worgeordie]

The good properties will already have been sold off

to 'Friends" of the banks, what is left will be a right

load of <deleted>,but not at <deleted> prices, I have viewed

these sales they have at certain times of the year,

and it's a load of rubbish.

 

I believe in the West banks cannot hold on to 

repossessed properties but have to unload them ?

regards worgeordie 

[Leaver]

On 12/14/2020 at 2:31 AM, webfact said:

“If we can’t get good prices for our NPAs, we will not sell them,” he said.

That would make them a liability, and for how long will you carry that liability?  

[Leaver]

On 12/14/2020 at 3:39 PM, Cake Monster said:

It is only a matter of time before the NPL rate reaches levels that the Banks cannot handle and will be forced to sell NPA

Sell to who????

[Cake Monster]

17 hours ago, Leaver said:

Sell to who????

There are specialist Big Money Outfits that buy up bad loans and NPA, usually for only about 1/3  of the true value, and then resell the Loan or NPA to other Companies for a Profit.

BAM here in Thailand is one of these Companies.

[Andy from Kent]

 

 

I don't believe an average person can find anything resembling a bargain among the properties these banks will unload.

 

 

[Leaver]

On 12/21/2020 at 1:04 PM, Cake Monster said:

There are specialist Big Money Outfits that buy up bad loans and NPA, usually for only about 1/3  of the true value, and then resell the Loan or NPA to other Companies for a Profit.

BAM here in Thailand is one of these Companies.

Thailand has record household debt.  When it comes to the housing market, none of the companies are going to want to touch a portfolio of non performing assets because there are no Thai's, in any numbers, with the capacity to buy in.

[ExpatOilWorker]

On 12/21/2020 at 1:04 PM, Cake Monster said:

There are specialist Big Money Outfits that buy up bad loans and NPA, usually for only about 1/3  of the true value, and then resell the Loan or NPA to other Companies for a Profit.

BAM here in Thailand is one of these Companies.

JMT is another and they are doing fine at the moment. 

 

[Cake Monster]

On 12/24/2020 at 9:26 PM, ExpatOilWorker said:

JMT is another and they are doing fine at the moment. 

 

EOW,

I read a report about   5-6 weeks ago in BP News, that BMA were doing really well, and that they were waiting it out before buying any more NPA, as they were expecting to pick up these NPA for only 20% of there value due to the volume available.