The Renovation of Non-Performing Asset (NPA) from Bangkok Commercial Asset Management Company Limited

Abstract

The exponential growth of Non-Performing Assets (NPA) as a result of the Asian financial crisis in 1997 led to the establishment of an asset management company, under the financial institution development plan devised by the Ministry of Finance pursuant to the Cabinet’s resolution, in order to manage distressed assets of other financial institutions and operating as a debt collection agency. Nevertheless, Thailand’s NPA tends to increase since 2012 and has been decelerating in the recent years. 

This article contains questions in research in which physical factors are important and affect the distribution of Non-Performing Assets (NPA) for residential units. The objective is to study the physical improvement model and the renovation of such assets. Also study the Company's guidelines and policies for managing Non-Performing Assets from Bangkok commercial Asset Management company limited (BAM).  This research has collected data by a literature review and from the Time-series data gained the information on asset trading from 1998-2020, a total of 22 years. The next step is to survey on present properties, to bring such information to interviews with experts and the staff in order to analyze and find a consistent in any physical factors that affect the sale of such assets from BAM. 

From the study, it was found that the company has a total of 9,136 residential assets worth 16,008 million baht. And 48 percent of the assets are located in Bangkok, with 3,592 units worth 7,770 million baht. For the concluded, the most unsold assets are base in the category of Detached houses, within the price range of 5-10 million baht, in total of 221 units worth 1,464 million baht or 30 percent of the total assets in the category. From the analysis it was revealed that the average period for holding the assets has decreased after the renovation, dropping from 3.2 years to 2.1 years. And before being renovated, the Non-Performing Assets have been vacant for a long time and have not been paid attention to. But when the property is developed, it can be sold faster and the most prevalent physical feature are the houses that have been clean up and repainted on the exterior. For the delay release are homes that have been fully renovated and repainted, all-in good condition ready to move in. However, there are additional costs associated with improvements.