JMT set for purchase of NPAs from banks

JMT Network Services will soon expand its bad-debt-collection service to non-performing assets from banks after registering as an asset-management company.

"We are buying NPAs from banks. The deals are expected to be known in June. We will start collecting NPAs in the SME segment before expanding to corporate NPAs," chief executive officer Piya Pong-acha said yesterday.

JMT currently manages bad retail and instalment loans purchased from financial institutions.

The company has registered to be an asset-management company (AMC) so that it can collect debts in the property sector and manage NPAs from financial institutions. The company expects the AMC process will be completed in three months.

JMT will manage NPA portfolios differently from other AMCs. After purchasing a portfolio, it will negotiate with existing borrowers to continue debt payment, while other AMCs renovate the assets to sell to new owners.

The company will expand its instalment loans to 20 per cent of the total portfolio this year from 15 per cent by buying such loans from leasing companies, including bad debt from the first-car scheme.

The company estimates bad debt from the government's first-car incentive programme at 2 per cent or Bt13 billion of the total auto loans of Bt680 billion for the project. JMT aims to buy Bt3 billion in instalment loans from a leading hire-purchase operator.

The portfolio mix this year will change slightly as bad debt from personal loans and credit cards will drop to 70 per cent from 80 per cent.

The bad-debt-management business is playing a more crucial role in the banking industry because banks can realise full revenue from the write-offs of debt sold to JMT or AMCs.

The company is interested in buying loans from banks in line with rising household debt. Household debt in the fourth quarter of last year increased to Bt52 billion from Bt47 billion in the same quarter in 2011.

Even though non-performing loans from household debt are stable, the company sees the increasing debts as an opportunity for AMCs to help banks collect their expected bad assets.

JMT recently won the bidding to manage the bad personal and credit-card loans of Siam City Bank before it merged with Thanachart Bank.

The company targets Bt10 billion per year of bad-debt purchases from financial institutions to support revenue growth of 25-30 per cent per year.

Last year, it purchased Bt6 billion worth.

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Source: http://www.news.thethailandlinks.com/2013/03/29/jmt-set-for-purchase-of-npas-from-banks/