Bank of Ayudhya (Krungsri) believes the trend of rising interest rates will not affect real demand for mortgages, predicting positive demand in the final quarter this year.
Krungsri announced outstanding mortgage loans as of September this year of 294 billion baht, a 1.3% increase from the end of June this year and 2.9% from the end of last year.
The property market has improved steadily, the bank said in a statement to the Stock Exchange of Thailand (SET).
Head of retail and consumer banking Phonganant Thanattrai said the bank expects demand for housing loans to continue improving in the fourth quarter, in line with the country's economic recovery and the rebounding mortgage market.
Housing loan growth for the whole banking industry is expected to reach 6-7% this year, said Krungsri.
"While interest rates are rising, it should not impact homebuyers who have real demand applying for a mortgage," he said.
With long monthly instalment periods for the loan products, the bank can help customers calculate a monthly debt payment that matches their income and repayment ability, said Mr Phonganant.
Krungsri is prepared to help homebuyers access mortgages using a responsible lending approach, he said.
The bank maintained minimum retail rate charges for retail loan products including mortgages -- unchanged at 6.05% per year -- to help individual customers amid an uneven economic recovery.
Krungsri increased both its minimum loan rate and minimum overdraft rate by 0.25%, and it raised fixed deposit rates by 0.01-0.05%, following the Bank of Thailand's latest policy rate hike.
The central bank raised the rate by 0.25 percentage points to 1% in September in a bid to tame inflation.
Mr Phonganant said Krungsri would not focus on refinancing mortgages as interest rates hike, instead paying attention to asset quality.
In addition, the bank will continue to help vulnerable retail customers survive the impact of the pandemic, he said.
According to the bank's statement to the SET, as of Sept 30 loans outstanding under Krungsri's customer relief programmes stood at 155 billion baht, accounting for around 8% of total loans outstanding.
Mr Phonganant said the bank has been providing financial knowledge and a financial advisory service to consumers through its "Krungsri The Coach" programme via several social media channels and digital platforms.
The bank launched the programme around seven months ago and received a better response than it expected, with total viewership of around 80,000 per episode.
Krungsri The Coach is part of the Krungsri One Retail strategy, which aims to pave the way to the regional market.
The bank wants to expand its retail customer base to 15 million accounts in the Asean market in 2024 from 12 million accounts at present.
