As Thai household debt soars while income and economic growth lag, non-performing loans have piled up to more than 1.2 trillion baht, raising the difficult question: "How should this massive debt be resolved?".
Thairath Money had the opportunity to interview Dr. Rak Varakitphokatorn, CEO of Bangkok Commercial Asset Management Public Company Limited (BAM). As one of Thailand’s largest asset management companies (AMCs), he shared methods to "rehabilitate non-performing loans" from individual borrowers to the national level, turning them back into “good debt” within the economy.
Dr. Rak compared Thailand’s NPL situation (loans overdue by more than 90 days) to an enormous and expanding “hell.”
“Those who can no longer continue—the restless souls who are debtors—are running into this hell, which now amounts to 1.2 trillion baht in NPLs that have been sold off, not even counting some NPLs still held by banks.”
However, the 1.2 trillion baht figure may be just the tip of the iceberg. Including high-risk loans such as Special Mention (SM), which are overdue 1-3 months, total debt value could reach 2 trillion baht. Thus, “debt” is a major issue attracting widespread attention, including from AMCs and others managing these bad debts.
“The AMC industry forms an ecosystem, acting like a system that absorbs waste from financial institutions. We are like a wastewater treatment plant adding oxygen. From NPL debtors, we can offer a new chance. When they repay, their debt becomes RPL—Re-performing Loan (good debt). Those who once failed can become proud economic warriors again.”
Currently, with market NPLs at 1.2 trillion baht, BAM is a major player holding debt worth over 490 billion baht. As Thai NPLs may increase, BAM must accelerate its adaptation to convert as much bad debt into good debt as possible through new solutions it is beginning to implement.
To clarify, AMCs bid to purchase NPLs from financial institutions at prices below the original loan value—for example, a 100-baht loan might be bought for 30 baht. Then the AMC offers debt restructuring solutions to debtors and manages the sale or disposal of assets (NPA).
“What I must do simultaneously is change the mindset within BAM and other AMCs. If we say we must collect 100 baht on every baht and satang of debt that we bought for only 30 baht, that’s a zero-sum game where no one wins,” said Dr. Rak.
Therefore, BAM’s strategy focuses more on the human aspect—how to restructure debt so both debtor and BAM can move forward. This involves finding the "sweet spot" where the debtor can realistically repay—for example, negotiating a repayment of 80 baht on a 100-baht debt. If that’s not feasible, the amount is adjusted to a level the debtor can manage to fully repay.
For business debts requiring liquidity, BAM as creditor also wants repayment. We believe there must be intermediaries who facilitate thinking into a workable debt restructuring plan. BAM promotes Financial Advisors (FAs) licensed by the SEC to mediate negotiations, enabling debtors to continue their business and repay long-term, with BAM subsidizing part of the FA fees.
Regarding the sale of assets awaiting disposal (NPAs), loan rejection rates, especially for homes priced under 3 million baht, exceed 50%, indicating reduced purchasing power for ordinary buyers. Thus, it is difficult for BAM to wait for customers to obtain bank loans to buy assets. But if people still want homes and can only afford monthly payments in the thousands, what can be done?
In 2025, a project was launched, “Public Assets”, allowing those rejected for loans to "pay directly to BAM," starting at 1,000 baht per month. This targets informal workers without financial documents, such as street vendors and motorcycle taxi drivers. They discuss income and debt burdens to determine affordable payments. After three months, loan releases reached 1,074 units, a very high number.
In the first quarter of 2026, BAM plans to launch new projects such as “Assets with Tenants,” targeting investors seeking passive income, with professional agents managing leases comprehensively, along with “BAM for the Heroes,” which will sign MOUs with the military and police departments to help government officials own homes from a young age, offering options to use end-of-service gratuities to pay off debt.
Dr. Rak continued that in 2026, BAM plans to invest about 4 billion baht to purchase debt worth 18-20 billion baht but will also focus on accelerating debt turnover, aiming to reduce asset holding periods from the current total of 15 years (with asset sale periods shortened from 6 to 3-5 years).
“The old AMC model borrowed huge sums to buy debt and then kept it frozen, including BAM which once had liabilities of 100 billion baht and outstanding debt of around 500 billion baht, gradually selling assets. These legacy debts required high provisions.”
BAM’s main strategy for asset disposition is to transform other AMC competitors and property developers, who otherwise compete to buy or sell secondhand homes, into “partners.” For example, when BAM wins large debt portfolios, it can sell some assets to smaller AMCs with specialized expertise but less capital, charging a fee on the margin.
For developers, BAM partners with companies like VBeyond, Bangkok Asset, and SA, experts in home repairs and familiar with local areas. BAM allows them to select assets for development with six months to renovate, charging a 5% performance bond fee. After renovation, developers sell to customers, and BAM transfers the asset directly without additional costs to the developers. BAM acts like a “landowner” opening the field for partners to jointly reap benefits.
With these strategies, BAM believes it can accelerate NPA sales beyond the usual annual average of 25,000-27,000 units, targeting collections of 19 billion baht, growing from about 18 billion baht in 2025.
Finally, Dr. Rak described BAM’s most important area: developing personnel alongside the organization. BAM aims for steady growth where employees work happily, maintaining workload but working smarter and more sharply, with everyone sharing the same vision—that all roles from front to back office complement one another, aided by technology for smooth collaboration.
“When we work as one team, it creates a happy and sustainable organization.”
Note: Currently, BAM’s loan portfolio value (on rights basis) stands at 491.846 billion baht, divided into Corporate loans at 248.232 billion baht (50.47%), SMEs at 122.827 billion baht (24.97%), and retail loans at 120.787 billion baht (24.55%).
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