Tuesday, September 22, 2009

GSB sets up unit for bad assets

       The Government Savings Bank has set up a new unit to manage non-performing assets to help the state bank clear its asset portfolio and increase profits.
       Lersuk Chuladesa, the GSB president and chief executive, said that even though the bank's non-performing assets (NPAs)were relatively small, the new unit would help more efficiently manage the disposal process to maximise returns.
       The NPA portfolio currently includes 240 properties with a value of 85 million baht. So far this year, the bank has sold of 253 plots worth 144 million baht.
       Asset quality at the GSB has actually improved over the past year despite the economic downturn,with non-performing loans of 20 billion baht, or just 3.07% of total outstanding loans.Around half of the loans represent property loans, of which 70% are currently in the foreclosure process with the bank seeking to seize pledged collateral.
       Non-performing loans at the end of last year stood at 3.31%.
       Before 2008, the bank typically focused on debt restructuring in dealing with delinquent clients, and as a result, took claim over relatively few assets pledged as collateral.
       "This really is the first year that the GSB has begun managing nonperforming assets. This new strategy has been one factor in helping the bank reduce its non-performing loans," he said.
       Mr Lersuk said the GSB was also prepared to accept the government's new policy to help refinance underground loans for people with heavy debt problems.
       The Finance Ministry wants the GSB and the Bank for Agriculture and Agricultural Co-operatives to take a more proactive role in assisting the poor by refinancing debt owed to loan sharks and other informal sources.
       "We will have to screen the borrowers of course, and set certain rules. If it is debt incurred from, say, gambling or illegal drug use, then we don't want any part of it," Mr Lersuk said.
       "But for small entrepreneurs faced with difficulty, we are prepared to help,"he added.

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