Wednesday, February 26, 2020

Home loan scheme set to boost SCB

Mar 21. 2012
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By Sucheera Pinijparakarn


Siam Commercial Bank expects its outstanding mortgage lending to exceed Bt400 billion by year-end thanks to new loans to be extended under the Bank of Thailand's soft-loan scheme.

The bank has been allotted Bt36.8 billion in soft loans. It opted to extend the loans to home buyers, who are entitled to low interest rate for the first Bt1 million amount. Under the soft-loan scheme, the itnerest rate is fixed at 3 per cent for five years.

The programme was launched as part of the central bank’s Bt300-billion soft-loan scheme to help flood-hit individuals and small and medium-sized enterprises.

Executive vice president Pikul Srimahunt said yesterday that although the severe floods had negatively affected the property market, demand for new homes continued and people were now looking for a second residence in less flood-prone accommodation such as condominiums.

Moreover, detached housing and townhouses priced up to Bt3 million are still in great demand.

Under the soft-loan programme, SCB is joining with property developers to provide mortgages to flood-affected customers who want to purchase a new home or who wish refinance or repair flood-damaged residences.

The bank estimates the Bt36.8 billion worth of funding will be used up by the end of the second quarter, she said, adding that the amount is likely to be insufficient for customers based on SCB’s loan growth over the first two months of the year. The soft-loan scheme might therefore have to be extended to meet demand.

The bank’s home loans in January and February grew by 20 per cent from the same period last year, to Bt13 billion.

The executive said the soft loans would boost the mortgage market, with SCB now expecting its outstanding lending in the segment to reach Bt410 billion this year.

The bank had previously projected outstanding home loans to come in at Bt370 billion, against Bt330 billion at the end of last year.

To qualify for assistance under the scheme, individual borrowers must be flood-affected people who require funding to buy a new home, refinance a current loan or repair a flood-damaged property.

SCB has also launched its own campaign, "SCB Home Loan 555", with privileges for customers and the scheme being designed to assist the cross-selling of its products.

Privileges including a zero interest rate in the first three months through to a maximum of 10 months, home insurance cover against fire and robbery, and a payout if a customer’s home is flooded.

Customers under the scheme will also benefit from a waiver of home registration and other transaction fees at the bank.

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