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LENDING & CREDIT | Cesar Tordesillas, Thailand
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Siam Commercial Bank raises 2012 growth projection for mortgages

Siam Commercial Bank is aiming to raise its housing loans by Bt120 billion this year, instead of the expected Bt95 billion.

This is based on growing demand for low-rise residential and condominium projects.

The bank aims to secure Bt20 billion of the Bt50 billion worth of projects of major developers that will be transferred to home-buyers this quarter, Pikul Srimahunt, an executive vice president, said yesterday.

In the first nine months, the bank increased its home loans by 9 per cent or Bt95 billion, faster than the 6-per-cent pace of the market. Its outstanding mortgages stood at Bt370 billion. If it can achieve its fourth-quarter growth target, it will end the year with close to Bt400 billion, she said.

The key factor in the growth of mortgages is urbanisation, which has accelerated supply. The major developers are now launching projects in major provinces and moving towards smaller condo projects in a bid to provide homes for those with stable purchasing power.

The property market is not in an oversupply situation. Developers have experienced bubbles in the past, so they have ensured that their debt-to equity ratios are not over 2 per cent, unlike 17-18 per cent in 1997.

"We believe developers can find the balance point for their business, such as residential projects that are close to infrastructure as well as mass-transit lines," Pikul said. "The housing demand of the bank's customers is more real than speculation."

SCB's housing-loan portfolio is about 20-per-cent condos and 80-per-cent low-rises such as townhouses and detached homes.

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