BBL gets into auto lending
Specific loans for first car buyers
Even though Bangkok Bank is not ready to enter the hire-purchase (lease-to-own) business, it has developed a product called Bualuang Poonphol for First Car to help it become more familiar with the car-loan market.
“We are learning about the auto-loan market in terms of secured loans, while other retail loans have been extended as well. Even though our share in the retail segment is modest, the annual return continues to increase,” executive chairman Kosit Panpiamras said yesterday.
The product launched three months ago is part of specific-purpose loans, not hire-purchase loans, because the conditions are different.
The bank has no plan to do hire-purchasing because it wants to study the market carefully, but it sees the need to test the market in preparation for a new cycle of car-loan demand.
Demand in the last cycle was sparked by the government’s first-car scheme, which the bank did not join as a lender because it had no hire-purchase products like other banks.
Retail accounts for 10-11 per cent of its portfolio mix, the lowest among large banks, making its net interest margin trail banks that chase retail loans.
Pochanee Kongkalai, senior vice president, said Bualuang Poonphol for First Car offered a long-term equity loan of up to seven years with a low effective interest rate, not the flat rate that hire-purchase lenders offer.
Borrowers will get a high credit line for up to the full cost of the car with a ceiling of Bt6 million at an interest rate of minimum lending rate minus 1 percentage point for the whole term.
However, all borrowers must have residential property available to back up the loan.
Saving for customers
Compared with a flat rate, the variable rate of MLR-1 point will help customers save money while getting up to 100-per-cent credit for their car purchase, Pochanee said.
“Many customers asked us about auto loans many times. That persuaded the bank to rethink whether we should have a similar auto loan for them. But our product should not spoil the customers. We have designed the purpose loan and required residential property as collateral, and the borrower must be a first-car buyer,” she said.
Hundreds of customers, both existing and new, have already used the Bualuang Poonphol for First Car programme, she said.
