CIMBT keeps focus on mortgage refinancing

CIMB Thai’s (CIMBT) mortgage refinancing proportion climbed significantly to 30-40% of the bank’s new housing loans amid the industry’s high rejection rate for home loan applications.

The small bank is focusing on home refinancing products by offering several packages, which have received a warm welcome from customers, said executive vice-president Onanong Udomkantong. The bank is concentrating on homeowners with good repayment records, she said.

CIMBT’s monthly income from mortgage refinancing averages around 30,000 baht per user, said Ms Onanong.

The bank’s mortgage refinancing accounted for 7-8% of its new home loans last year.

“Even with home refinancing making up 30-40% of new home loans, it doesn’t create higher risk for the bank given the good quality customer base. Non-performing loans in the overall mortgage portfolio stayed above 4%, but this is deemed a satisfactory level,” she said.

CIMBT has continued to offer refinancing packages and developed campaigns to attract a wider base of customers the past few years. Upper-income earners have been the bank’s initial focus, though it is offering refinancing to middle-income earners with minimum monthly income of 15,000 baht because of good asset quality and the bank’s credit scoring system development.

CIMBT offers four packages for mortgage refinancing with interest rates in a range of 5-6.2% per year. The packages are available for customers with monthly income of 15,000 baht and higher.

During the eight months to August, the bank’s housing loans almost reached the bank’s full-year target of 71 billion baht, or 9-10% growth from the end of last year.

It aims for 10% growth in retail loans to 85 billion baht at year-end, of which 71 billion is mortgage, 13 billion is personal loans, and the remainder is for credit cards.

Presently the bank’s personal loan portfolio amounts to 12 billion baht.

The bank is also offering refinancing packages for personal and credit card loans, focusing on clients with monthly income of 20,000-30,000 baht. The interest rate for personal loan refinancing are in a range of 9-11% per year depending on the conditions of each package.

CIMBT shares closed yesterday on the Stock Exchange of Thailand at 1.10 baht, an increase of one satang, in trade worth 2.16 million baht.