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Published on July 15, 2007

However, the bank will mainly consider borrowers who have capability for debt-servicing. The bank needs at least three years for proof of financial discipline, said senior executive vice president Theprach Winotai.

"After customers sign a loan contract, they have to pay instalments for 36 months, but they do not yet own the asset. The asset is transferred to them from the 37th month onward on condition they do not default during the first 36 months," he said.

Under the bank's conditions on mortgages to customers listed by the National Credit Bureau (NCB), the loan is offered to customers whose debts are on sale at the NPA Grand Sale only. Customers can directly approach the bank. If approved, Siam City Bank becomes their sole creditor. The sixth NPA Grand Sale is being held from yesterday to tomorrow at the Bangkok Convention Centre.

Theprach said the bank had used this strategy on NPA sales for around one year and received a good response from customers. Though some later became re-entry non-performing loans (NPLs), this was an insignificant amount, he said.

NCB CEO Niwat Kanjanaphoomin said the lending strategy of Siam City Bank was a win-win situation for both bank and customers. Home-buyers will have the opportunity to own residences and be able to prove their financial discipline in order to rebuild a new financial record.

Separately, Kasikornbank vice president Chatchai Payuhanaveechai said the bank had no policy of offering consumer loans to defaulters due to its risk-management policy, having in any case enough loan demand from ordinary customers. This year it expects Bt24 billion worth of new mortgages, far higher than its goal of Bt18 billion.

Somruedi Banchongduang

The Nation