And despite the gloomy environment of slipping consumer confidence and political uncertainty, the visitors were there on the first day, shopping for cheap loans.

Most visitors and exhibitors were focused on mortgages, still the most sought-after loans despite the economic slow-down. Already, it seems likely that demand for mortgages will overshadow all other financial products being offered at the four-day expo.

Competition among the banks in housing loans is also greater than in previous years, with pricing still the key strategy to attract home-buyers. Zero-interest promotions are being offered by rival large-sized banks to make the opening months of mortgage repayment more enticing.

Bangkok Bank, Siam Commercial Bank (SCB) and Kasikornbank - the country's biggest, third- and fourth-biggest banks, respectively - are offering housing loans with no interest charges in the first three months. Thereafter, each bank's rates differ.

At around 3am yesterday, Kasikornbank changed its original plan and offered a zero-interest deal for mortgage loans after earlier fixing its promotion rate at 1 per cent to 1.25 per cent. The change followed its discovery that its main rivals were going for zero interest.

Kasikornbank was the first bank to announce a mortgage-promotion campaign for the Money Expo.

Prapaisri Palawattanakul, 45, a government officer who applied for an SCB mortgage loan, said she was looking for a housing loan after having made a decision to buy a house. She believed it was possible to find a better repayment rate among the promotions at the expo, rather than applying directly to banks.

"I will look at several banks to compare the conditions of each," she said, while filling out an application form at SCB. "I want to know whether SCB will provide the impressive services it has advertised, so I am applying for a loan from SCB."

Another would-be housing-loan borrower, Tawatchai Eakthanavarn, 26, a private company employee, said he would pay attention first to interest rates stated on loan applications. Although several banks are offering zero rates, he will also consider the details of other long-term conditions.

Tawatchai said the present time was appropriate for borrowing because interest rates are on the way down.

Current economic gloom and low confidence was reflected in the sluggish response to other consumer loans on offer, especially personal loans and credit-card loans. Demand for these products is expected to fall significantly from that in previous Money Expos.

With the sufficiency theme of this year's Money Expo, banks' exhibits are more simply presented than in previous years in terms of both decoration and activities. For example, Krung Thai Bank, the country's largest state-owned bank, has adopted a "Happy Life - Sufficient Life" concept for its exhibit.

Finance Minister Chalongphob Sussangkarn said the expo would help stimulate domestic consumption. Both the money market and the capital market are expected to help to drive the country's economy.

Meanwhile, the four stated-owned banks have also joined the money fair this year, which will help to boost lending at the grass-roots level, in accordance with the government's Bt44-billion economic stimulus package.

Money Expo 2007 runs until Sunday at the Queen Sirikit National Convention Centre.

In a separate matter yesterday, Bank of Thailand senior director Tongurai Limpiti said that five or six of the country's commercial banks were required to set aside additional reserves totalling Bt20 billion this year to fully comply with International Accounting Standards.

However, the increased provision will not force the banks to increase their capital because they have recorded net profits and their capital requirement ratios are in line with Bank for International Settlements standards.

The new accounting standard will be fully effective next year.

Tongurai said the banking system's net non-performing loans were expected to be about 3 per cent of total lending by the end of this year, down from the current level of 4.1 per cent.

Somruedi Banchongduang

The Nation