Kasikorn sets its sights on the provinces

Kasikornbank will penetrate deeper into the provincial mortgage market to boost its upcountry home loans |to 40 per cent of total housing loans in two years from 30 per cent |currently.
The move is part of KBank’s strategy to broaden its business across the country and cash in on the rising demand for people in the provinces to own their own home, Chatchai Payuhanaveechai, an executive vice president, said yesterday.
The bank will focus on 14 key provinces with high purchasing power.
People in the provinces are mainly looking for homes priced from Bt1 million to Bt2 million. They will have to show a monthly income of at least Bt20,000.
In Bangkok, a monthly income of Bt50,000 is needed to buy a home priced at Bt3 million and above.
About 70 per cent of KBank’s mortgage customers earn more than Bt50,000.
The provincial mortgage market is growing at 10 per cent a year, compared with 8 per cent in Bangkok, so there is potential for the bank to pump up its loan portfolio. KBank projects its outstanding loans at Bt195 billion at year-end, up from Bt193 billion currently.
KBank’s marketing strategy for the provinces is to offer products bundled with a home loan to differentiate itself from other banks, while customers will enjoy more benefits than just a loan.
The bank will develop both pre-finance product bundles for developers and post-finance product bundles for home-buyers.
Brand awareness is essential for acquiring customers in the provincial market. KBank will not only focus on lending but also educate people on all of the products of Kasikorn Group, said Krisada Lam-sam, a senior executive vice president.
Chatchai said the increase in monthly salaries to Bt15,000 for new graduates presents an opportunity for mortgage lenders to broaden their customer base to the mass market, or homes priced no more than Bt1 million. Customers earning Bt15,000 can borrow Bt700,000 to buy a home priced from Bt800,000-Bt850,000.
The mass market represents |4-5 per cent of KBank’s home-loan portfolio.