RETAIL BANKING | Cesar Tordesillas, Thailand

Krung Thai Bank expects smaller Q1 loan growth

Krung Thai Bank lowered its mortgage loan growth projection for the first quarter of the year to US$161.3 million from US$322.68 million.


However, the bank kept its loan growth target of 18 billion baht this year, hoping special rates under the soft-loan scheme offered to flood-hit victims will spur its housing loan growth and revive demand after a sluggish start in 2012. Under the scheme, the Bank of Thailand distributes 210 billion baht to banks to be lent to flood-affected clients at a fixed rate of 3% for the first five years on the first 1 million baht of credit.

The portion of a loan above 1 million baht will carry normal bank rates.

Homebuyers remain wary and prefer to wait for a clearer economic outlook before making decisions, said KTB's senior vice-president Tinnakorn Boonyakalin.

The bank received 12 billion baht worth of soft loans from the central bank. It will allocate the amount for small and medium-sized enterprises loans and consumer finance.

KTB senior executive vice-president Weidt Nuchjalern said for the portion of loans in excess of 1 million baht under the soft loan program, the bank offers a no-interest scheme for the first eight months.

It also offers the minimum retail rate minus 0.5% per year for its Home for Cash personal loans for restoration and rebuilding of flood-damaged houses.

For SME loans, operators can apply for both short-term loans such as promissory notes, or term loans without fees for collateral appraisal and loan arrangement. 'We expected all soft loans to be lent within three months and we would be ready to ask for additional lines from the central bank," said Mr Weidt.

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