Commercial banks' mortgage growth is expected to continue gaining momentum until the end of the year, with the increase in marketing activities of both financial institutions and property developers prompting tougher competition, say bankers.
Kasikornbank (KBank) is set to achieve its full-year housing loan growth target of 5-7% after it managed to meet its goal for the first three quarters, said Alongkot Boonmasuk, senior vice-president for housing loan products and management.
The bank temporarily halted business activities and marketing campaigns in October for the royal cremation ceremonies, planning to resume them next month.
Competition in mortgages, particularly the launch of marketing campaigns, is expected to intensify for the rest of the year, he said.
"Both financial institutions and property developers have planned to roll out marketing campaigns for the next three months starting from November. This will encourage both loan growth and competition in the market," said Mr Alongkot.
KBank's asset quality of its housing loans has continued to improve due to the bank's stronger risk management, especially for new customers. But the bank needs to closely monitor and slow down lending to small businesses and the self-employed customer segment, he said.
Apart from KBank, other lenders also saw a rise in housing loans.
As of September, Siam Commercial Bank, the country's largest mortgage lender, saw its home loan portfolio rise by 2.5% from the end of last year to 623 billion baht, while Bangkok Bank's outstanding mortgages increased by 2.62% to 225 billion.
Nathapol Luepromchai, Bank of Ayudhya's (BAY) executive vice-president, said housing loan demand will be stronger in the final two months of this year because of seasonal factors.
The bank aims for 5% mortgage growth in the fourth quarter.
BAY's home loan portfolio rose by 7.35% from the end of last year to 211 billion baht. Kiatnakin Bank, a small bank, delivered a 149% increase from the end of 2016 to 9.2 billion.
Even though BAY slowed down its market activities this month, its number of home loan applications is still higher than forecast due to strong demand for loan products and the economic pickup, Mr Nathapol said.
BAY, the country's fifth-largest bank by assets, aims for its mortgage loans to rise by 10.5-11% this year.
