Bangkok Bank to expand personal loan offering

Bangkok Bank is studying he best way to expand in the personal loans sector.

The bank has only two products in the retail segment - housing loans and credit cards.

Thailand's largest bank has acknowledged that even though personal loans are a high-yield product, it is necessary to balance yield and risk, said executive vice president Thaweelarp Rittapirom.

Bangkok Bank's net profits have lagged behind those of Siam Commercial Bank and Kasikornbank, primarily because of a smaller proportion of consumer loans. Its consumer lending accounts for only 11 percent of its total loan portfolio, against 45 percent for corporate loans. 

By contrast, KBank's consumer-loan proportion is 26 per cent and SCB's 42 per cent.

Bangkok Bank noted that human resources would be a key component in moving to the personal loan segment.

The bank tested the personal-loan market last year by offering loans to payroll customers and employees of corporate customers. 

It also tested the consumer-loan segment by offering overdraft (O/D) loans to its mortgage customers.

Bangkok Bank soft-launched O/D loans in mid-2012, with new loans booked via this option amounting to around Bt1 billion. While O/D was initially offered to middle-management or white-collar people aged at least 30 years, the bank will now expand it to customers who don't hold mortgages with it and to general white-collar personnel who have worked for more than three years.

For more.