Bangkok Bank (BBL) is moving forward in the personal loan market by preparing to enter the area of unsecured financial products.
With intense competition in the segment, keeping the existing customer base will be a key factor.
Executive vice-president Thaweelarp Rittapirom said BBL has offered overdraft credit lines for existing mortgage loan customers as a pilot project since the middle of last year.
The additional credit lines are for clients with a good history of making payments.
The bank has booked outstanding overdraft mortgages of 1 billion baht and is planning to increase the amount significantly this year. Product cross-selling from the housing loan base is a key strategy to expand overdrafts.
BBL's outstanding mortgage loans total 157 billion baht, with growth aimed at 10-12% this year.
Mr Thaweelarp said BBL has explored the personal loan market before but has yet to enter unsecured finance.
Personal loans will help hold BBL's existing customers while expanding the client base amid strong competition in the retail banking business.
"We mainly pay attention to good risk management, while the central bank also warns about higher household debts and a bubble," said Mr Thaweelarp. "So BBL needs to study well before entering the unsecured loan market."
BBL, the country's largest bank by total assets, has been conservative with consumer finance.
For retail debt, it deals only in mortgages and credit cards.
Despite a long time spent studying personal and auto loans, the bank has yet to introduce such offerings.
Likewise, in the business segment it provides only mortgage and plastic card loans.
BBL has no clear plan to launch auto loans the way other large banks have under the universal banking concept.
According to Asia Plus Securities research, retail loans represent the smallest portion (11%) of BBL's total loan portfolio of 1.48 trillion baht.
Corporate banking business is the biggest at 47%, followed by small and mid-sized business (26%) and foreign business (16%).
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter