Money & Banking magazine, organiser of the 14th "Money Expo", expects total transactions at the four-day event, which started yesterday, to fall to Bt90 billion from Bt154 billion last year in line with the lower consumption resulting from the ongoing p
Meanwhile, financial institutions are likely to be more cautious in promoting special campaigns for loan products such as mortgages at the fair because the Bank of Thailand has sought their help in reducing household debt.
Except for Bank of Ayudhya, commercial banks that joined the event are not offering zero-interest home loans, but the banks still hope mortgages will continue to be the biggest transactions at the expo.
Krungsri is offering zero interest for three months on its mortgages, as is the state-owned Islamic Bank of Thailand, which offers the same deal for home refinancing.
Chartchai Payuhanaveechai, executive vice president of Kasikornbank, said most banks were staying away from zero-interest home loans on the advice of the central bank and to ensure customers understood the true costs of financing a home. Moreover, banks’ margins from mortgages are too narrow to gain much from the zero-interest gimmick.
KBank is, however, offering a special home-loan interest rate, and customers who apply at the expo have a chance to win a Mercedes-Benz.
KBank targets total transactions from lending and deposit products at Bt10 billion from this event.
Siam Commercial Bank, the largest mortgage lender among commercial banks, is offering free air tickets to customers who apply for a housing loan at the expo. It is also offering a zero-interest deal for its My Home My Cash product. This product entails low risk for the bank because customers who apply for the programme are home-owners who have paid off their mortgages, said Yol Phokasub, senior executive vice president of SCB.
Some banks including Krungthai Bank and Thanachart Bank are offering interest rates of less than 1 per cent on mortgages. KTB is offering 0.99 per cent for eight months and TBank is offering 0.25 per cent for six months.
In terms of fund products, CIMB Thai Bank is offering the most attractive campaign, a 36-month product paying 4 per cent per annum tax-free. The deposit product also offers free personal accident insurance. The required deposit is Bt1,000-Bt16,000.
Adisorn Sermchaiwong, senior executive vice president of CIMB Thai Bank, said the major banks were offering a full range of products at Money Expo, so a small bank like his had to change its mindset, promoting financial products to broaden the customer base and help drive cross-selling of products.
“We want to promote fund products instead of loans to comply with the central bank’s request that the banks help encourage saving during the economic uncertainty. Consumers don’t know much about savings products – they need to start out with simple products before we recommend other products such as mutual funds and insurance,” he said.
CIMB Thai hopes to cross-sell products to customers who are interested in applying for its 36-month product at the four-day expo.