New system to expand KTB loan portfolio

Krungthai Bank (KTB) is developing a credit-scoring system for housing loans to white-collar groups to ensure the lowest risk.

About 90 per cent of housing loans at KTB are to government officers and pay-roll officers. However, the bank wants to expand its portfolio to non-civil servants to increase its outstanding loans and remain the second largest mortgage lender in commercial banking.

KTB senior executive vice-president Weidt Nuchjalearn said the new credit scoring would help check the previous statements of white-collar workers who are new customers for housing loans, in order to understand their actual cash flows and their ability to pay debt.

The new credit-scoring system is expected to be ready in the next quarter, he said.

He said even though the bank had not yet seen a bubble sign in the property market, KTB must avoid non-performing loans by joining with developers to screen home buyers who are genuine residents, especially customers in provinces.

"We are not worried about speculation in Bangkok because the price of assets is higher than in the provincial market. We are closely watching speculation in provinces because the provincial economy shows higher growth. The safe way for the bank is in cooperation with big name developers who are expanding their projects in main cities, or the medium-sized developers who have pre-finance with the bank," he said.

KTB this year has aggressively captured housing loans because this kind of loan has greater debt repayment and can lead to cross-selling products. Further, the bank must find new loans to maintain the portfolio, said Weidt.

KTB targets new loans of Bt100 billion, double growth from last year's Bt45 billion-Bt50 billion. Outstanding loans by the end of this year will increase to Bt250 billion from Bt225.79 billion last year, he added.

KTB yesterday launched a housing loan campaign, offering two options to help customers' liquidity.

The campaign offers zero per cent to customers who want to pay the same amount of monthly instalment as the bank requirement, or pay the monthly instalment of Bt1,000 for a maximum of six months.

The campaign is designed to attract customers who want to buy home loans of between Bt1 million and Bt3 million.