Krungsri sets sights on more home buyers

Krungsri last year provided new housing loans totalling Bt50 billion and reached outstanding loans of Bt160 billion by joining forces with the top-five developers, said executive vice president Nathapol Luepromchai. This represented loan growth of 45 per cent, while the overall mortgage market grew by only 0.4 per cent to Bt577 billion.
In the past, Krungsri had little exposure to pre-financing for property developers, which meant it also had little opportunity to lend to homebuyers. But now, Krungsri is very active in residential-project financing and sends sales officers to those developers to offer special campaigns.
“Apart from the top five, we have acknowledged that there are other developers that require special campaigns from the banks for their customers because such campaigns help them release their stocks easily,” he said.
Nevertheless, the competition in housing loans this year is very serious, and some major banks have lowered interest rates for the first three years of a mortgage to attract customers as many of their existing customers pay down their loans.
“These pricing promotions are seen in some housing projects where they [developers] have strong relationships with bank partners,” Nathapol said.
Some non-listed developers are interesting and even though they are not large firms, they have been in the property sector for a long time, so the bank’s sales and marketing teams must work closely with them to design campaigns to tap their customers, he said.
Krungsri will focus on homes priced around Bt3 million, as this is a large market and such loans can still provide margins to the bank. As it acquires more developer partners, the bank can gradually build up its loan portfolio, he said.
Krungsri targets high growth of new lending for another year even though the economy remains stagnant.
It targets new loans of Bt55 billion to Bt60 billion in order to reach outstanding loans of Bt190 billion.
The bank wants to raise its ranking from fifth to fourth in the mortgage industry, and if it reaches its outstanding-loan target of Bt190 billion by the end of this year, it believes it will accomplish that goal.
The outstanding loans of the existing fourth-largest housing lender amount to Bt220 billion, so Krungsri will try to keep up the pace of new-loan bookings and build strong relationships with residential developers in a bid to get into the top four soon, Nathapol said.