Charlotte Donavanik, first senior executive vice president of Bank of Ayudhya (BAY), said that because mortgage lending and home sales slowed in the first half, loan providers and residential developers would stimulate business in the second half.

She said many real-estate developers, particularly listed companies, had failed to meet their first-half targets for home sales and thus would have to boost sales to maintain revenues.

Although her bank's housing loans were on target for the first half, it will still expand its new-loan products. The bank this year plans to provide Bt1.9 billion worth of new mortgage loans.

BAY, in conjunction with Lalin Property Plc, yesterday launched a promotional lending package involving zero interest for the first year for Lalin customers. Thereafter, interest will be calculated at the minimum lending rate (MLR) minus 0.75 per cent throughout the loan period. The bank's MLR currently stands at 7.75 per cent per annum.

The special rate is available to the end of next month. BAY has set a lending target of Bt350 million for the programme.

Charlotte said that four or five business partners in the property sector were currently in talks with her bank with regards to joint marketing campaigns. Each promotion - which would not focus on pricing strategy - would be different and in keeping with each company's character.

In addition, she said BAY would focus not only on providing loans for customers of listed companies' housing projects, but also for those of general residential developers. The bank has several property-sector partners, both in Bangkok and upcountry.

Chatchai Payuhanaveechai, senior vice president of the consumer loan department at Kasikornbank, said his bank would next month launch special travel promotions for mortgage customers. The holiday packages are expected to boost the bank's housing loans to meet its target for the year, after a lower-than-projected performance during the first half.

Kasikornbank's target for new mortgage lending is Bt18 billion for the year, but it loaned only Bt7.5 billion in the first half.

A zero-interest package is currently also available at Kasikornbank. Chatchai said it might be possible to offer longer fixed-interest periods next year, once domestic interest rates stabilised.

Siam City Bank recently introduced a fixed rate for the first three years of its mortgage loans to customers buying homes from listed real-estate companies' housing projects. The offer is good to the end of September.

Somruedi Banchongduang

The Nation