SCB setting up info centre for mortgage

As the biggest mortgage lender among Thailand’s commercial banks, SCB should expand its role to become an information provider, said Pikun Srimahunt, who is in charge of the bank’s small SME segment and mortgage product. 

“We are the market leader in pre-financing for property developers and post-finance to homebuyers, so information must be strong enough to support both our developer partners and homebuyers,” she said.

The information centre is expected to be fully operational by next year.

Real-estate developers and banks currently rely on the Real Estate Information Centre, which is under the auspices of Government Housing Bank.

Pikun said the economic slowdown had caused some small property developers to fade out, leaving the major developers in command of the market. However, those developers have changed their style of management as well, placing more importance on cost management and leveraging know-how from the international market. Collaboration between big Thai players and foreign partners through joint ventures will increase.

Meanwhile, homebuyers nowadays search for extensive information from all sources including social media before visiting the actual housing projects. Therefore, housing developers have to increase viral marketing to influence buyers’ decisions.

Younger consumers have seriously embraced technology into their lifestyles, which means people in their 30s who plan to buy a home are unlike people in the same age group just a decade ago, and SCB is seeking ways to respond to this, she said. 

Last year, SCB developed a master credit score (MCS) to track the transactions of its customers, which has resulted in a lower rejection rate for housing-loan applicants, now 17 per cent compared with 20 per cent before MCS was implemented, Pikun said.

“Around 90 per cent of borrowers are customers who have a relationship with the bank, while the rate of non-performing housing loans is only 1.8-1.9 per cent of outstanding loans of Bt570 billion, showing that customers have prepared well for applying for housing loans from SCB. Moreover, property developers help us screen customers,” she said.

SCB expects its outstanding housing loans this year to grow by 5 per cent to Bt600 billion, compared with growth of 9 per cent last year. Each year, SCB sees about Bt70 billion to Bt80 billion in repayments, so net lending each year stays at around Bt30 billion. Pikun said SCB expected Bangkok to fuel its new lending more than the provincial market because property developers have slowed down launches of new condominium projects upcountry, and the bank does not think this will change much in the coming years.

The ratio of mortgage borrowers in Bangkok to those in the provinces year to date is 60:40 versus 50:50 last year because in the first half, new lending upcountry dropped by 24 per cent. 

New housing loans this year are projected at Bt110 billion, down slightly from Bt120 billion last year. The bank booked Bt63 billion in new mortgages in the first half, she said, adding that the government’s temporary waiver of housing transfer fees that ended in April supported the new lending.