Thailand’s recent plan to deploy state-owned asset management companies (AMCs) to acquire non-performing loans (NPLs) has drawn analyst attention, particularly regarding the impact on Bangkok Commercial Asset Management (SET: BAM). Two leading brokerages, CGS International Securities (Thailand) and Kasikorn Securities, offered their perspectives separately on the implications for BAM.
The share price of BAM rose as much as 10.45% in the morning session to THB 8.45 per share before edging slightly lower to an 8% gain as the session progressed.
CGS International (Thailand) stated that Finance Minister Ekniti Nitithanprapas revealed that the government intends to allocate THB10 billion from the unused “You Fight, We Help” program to purchase NPLs with outstanding balances below THB100,000 from financial institutions. The loans will be transferred to state-owned AMCs, namely BAM and Sukhumvit Asset Management (SAM), according to CGS International, citing ministry statements.
The primary goal is to restructure small-ticket NPLs—such as motorcycle-title loans and unsecured personal borrowings—thereby easing individual borrowers’ financial burdens and reopening access to new credit. Both BAM and SAM would see an increase in NPL supply to service, translating into greater interest income, while banks could offload weaker assets from their books.
However, CGS International notes that details regarding selection criteria and conditions for eligible accounts remain unspecified. The firm believes the initiative will help reduce headline NPL figures in the near term but sees challenges in quantifying exact benefits for banks due to outstanding specifics.
The house maintains its Neutral sector view, keeping SCB and KTB as top recommendations.
Meanwhile, Kasikorn Securities highlights the potential for BAM to benefit from lower funding costs and additional revenues or management fees linked to the new inflow of NPLs. While precise allocation between BAM and SAM remains unclear, the brokerage’s sensitivity analysis estimates that each THB1 billion invested could boost annual profit by approximately THB50 million, equating to a potential 2% upside to its earnings estimates at a 10% IRR.
With the recent 9% rise in BAM’s share price, Kasikorn believes the market is pricing in expectations of THB4–5 billion in NPL purchases. The brokerage reiterates a Buy rating for BAM, with a target price of THB8.5 per share.
