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Top Thai distressed asset firm braces for difficult year ahead

[BANGKOK] Thailand's biggest manager of distressed assets is bracing for another difficult year in 2021, as the economy faces more headwinds from the pandemic.

Bangkok Commercial Asset Management Pcl, which buys soured loans and real estate from distressed debtors, has seen property sales slow, Chairman Bunyong Visatemongkolchai said in an interview. The firm is experiencing more difficulties in collecting repayments in its distressed debt business, he added.

The company's net income in the first nine months slid 77 per cent from a year earlier as restrictions due to the coronavirus hit the economic growth drivers of tourism and exports.

"Sales of our assets are very tough because people don't have money," said Bunyong. "Some of our debtors are still on debt repayment waivers because of the impact of the pandemic." Thailand has seen far fewer virus cases than many countries but still faced economic trouble. The nation's finance ministry forecasts the economy will shrink by a record this year after the almost complete loss of foreign tourism since March, with only a small number recently returning.

The pandemic may boost the sale of distressed assets by some local banks in 2021. But Bangkok Commercial Asset will take an "extremely cautious" approach toward purchases, according to Bunyong.

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The company expects to spend about 10 billion baht (S$441 million) for buying bad loans and distressed assets next year, lower than an estimate of 12 billion baht for this year, he said.

Publicly-traded Bangkok Commercial Asset was set up by the government to help manage distressed assets of commercial lenders during the 1997-1998 financial crisis. The Bank of Thailand's financial fund is its biggest shareholder.

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