What percentage of Thai bank loans do NPLs represent?
A. According to the Bank of Thailand, as of December 2007 gross NPLs represented 7.81% of total loans (commercial banks registered in Thailand), or 442 billion baht. The Bank of Thailand defines gross NPLs as the outstanding amount of loans classified as substandard, doubtful, doubtful of loss, and loss. Q. How are NPL sale transactions usually conducted in Thailand? A. For large portfolios, sales are generally conducted via a sealed auction bid process. It is also becoming apparent that both sellers and buyers are preferring to conduct NPL sale transactions via an Asset Management Company (AMC). While there is no legal requirement to involve an AMC in a NPL transaction, the key benefits of selling to an AMC include tax benefits for the buyer and seller – resulting in a possible higher purchase price for the NPLs – and an automatic right of subrogation for the AMC into an ongoing legal action. AMCs are governed by the Royal Proclamation on Asset Management Company B.E. 2541 (1998). Q.
