JK Asset Management (JK AMC), a joint venture forged by Kasikornbank (KBank) and JMT Network Services, has set an ambitious goal to become the country's No.1 asset management company, with bad assets of 100 billion baht under its management by 2025.
KBank and JMT set up JK AMC with registered capital of 10 billion baht, each holding a 50% stake.
The joint venture received a JV-AMC licence from the Bank of Thailand, which is offering them to new businesses to reduce bad debt in the banking system and help borrowers affected by the pandemic.
Suthirak Traichira-Aporn, chief executive of JK AMC, said the company completed an agreement to buy non-performing loans (NPLs) worth 30 billion baht in total from KBank in an initial deal.
The bank is in the process of transferring the bad assets to JK AMC, with the process likely completed within this month. The company will begin operations from the third quarter this year, said Mr Suthirak.
JK AMC also plans to purchase bad assets, both secured and unsecured loans, from other financial institutions, he said. The company targets bad assets under its management to reach 100 billion baht by 2025, which will propel it to become the country's No.1 asset management firm, Mr Suthirak said.
The country's two largest AMCs, the SET-listed Bangkok Commercial Asset Management (BAM) and the state-owned Sukhumvit Asset Management (SAM), have each begun the process of setting up JV-AMCs in collaboration with financial institutions and commercial banks.
Mr Suthirak, who also serves as JMT's chief executive, said JMT's expertise built up over 30 years in the business would facilitate JK AMC's business expansion. Innovative services and technology development to build a stronger ecosystem under a partnership model would also support business growth in the longer term, he said.
"Helping NPL clients, both retail and business owners, to become regular customers so they can apply for bank loans again is our key business purpose," said Mr Suthirak.
Patchara Samalapa, co-president at KBank, said the bank plans to sell NPLs to JK AMC worth 50 billion baht in total this year.
NPLs for the banking sector overall, including those of KBank, are expected to rise during the period 2020-2023, mainly as a result of the impact of the pandemic on businesses in Thailand. The bank plans to use suitable solutions to manage bad assets, including internal management, auctions and sales to JK AMC, said Mr Patchara.
Piya Pong-Acha, group deputy chief executive of Jaymart and director of JMT, said JK AMC would help to partially sort out the high NPLs in the banking industry, in line with the central bank's policy for issuing the JV-AMC licences.
