Bangkok Bank Plans To Penalise Late Payers

[george]

BBL plans to penalise late payers

BANGKOK: -- Nearly 10,000 holders of Bangkok Bank credit cards will not get their cards extended this year because of their late payment records.

The bank’s senior vice president, Shoke Na Ranong, said yesterday that the “risk group” represented 1.5 per cent of the bank’s total of 650,000 credit cards.

This amounts to 9,750 customers whose cards will not be extended.

It is normal practice for the bank to review its customers’ payment behaviour once a year and evaluate their risk profile.

This year’s risk group percentage is close to that of last year despite the economic slowdown. A risk group rate of 1.5 per cent is normal in the credit-card industry, he said.

Currently, the bank’s non-performing loans (NPLs) from credit-card business constitute between 1.2 per cent and 1.3 per cent of total outstanding loans. This is lower than the industry’s “normal” 4 per cent. Bangkok Bank aims to keep NPLs from its credit-card business down to less than 2 per cent of the total.

The bank expects its credit-card business target this year to be affected by the negative impacts of oil prices and interest rates.

Growth of credit-card lending may not meet the annual target of 12 per cent because, in the first nine months of this year it rose by only 8 per cent, Shoke said.

Nevertheless, the bank plans to hike its credit-card interest rate from 17.25 per cent per year to 18 per cent, effective from October 15.

The increase is not expected to have a further negative affect on the growth target because it will not significantly affect cardholders, he said.

“After the bank announced the increase there was no negative feedback from our customers because other card providers had also raised their interest to the ceiling rate,” Shoke added.

However, in the current “negative economic environment”, the bank will have to be more selective in accepting new customers as well as closely monitoring the risk profile of existing cardholders, he said.

Bangkok Bank has no plans to impose increased fees for calling customers who are late with payments.

On September 1, Krungthai Card, the country’s largest card provider in terms of card base, raised its fee for late payment to Bt250 per month.

--The Nation 2005-09-28

[terdsak_12]

There's me who makes over 250,000 Baht a month, and they won't give me a card to pay my annual $20 Yahoo account, Somchai who makes 8K and he's got credit cards coming out of his arse!!!!!

[yeti]

Nevertheless, the bank plans to hike its credit-card interest rate from 17.25 per cent per year to 18 per cent, effective from October 15.

<{POST_SNAPBACK}>

18% ??? Blooody Helll

[VanZam]

BBL plans to penalise late payers

Currently, the bank’s non-performing loans (NPLs) from credit-card business constitute between 1.2 per cent and 1.3 per cent of total outstanding loans. This is lower than the industry’s “normal” 4 per cent. Bangkok Bank aims to keep NPLs from its credit-card business down to less than 2 per cent of the total.

--The Nation 2005-09-28

<{POST_SNAPBACK}>

The other 96% of outstanding loans are all those Mercs and BMWs you see driving around

[Heng]

While they are at it, they should speed up their foreclosure procedures on NPL holders not servicing their property debt as well. One hears of people not making home/building/land payments for 24+ months before the bank starts to put any real pressure on these folks.

[ovenman]

While they are at it, they should speed up their foreclosure procedures on NPL holders not servicing their property debt as well.    One hears of people not making home/building/land payments for 24+ months before the bank starts to put any real pressure on these folks.

Why bother? The banks are already holding way too much foreclosed property that they seem none too anxious to sell at realistic prices.

[Heng]

While they are at it, they should speed up their foreclosure procedures on NPL holders not servicing their property debt as well.    One hears of people not making home/building/land payments for 24+ months before the bank starts to put any real pressure on these folks.

Why bother? The banks are already holding way too much foreclosed property that they seem none too anxious to sell at realistic prices.

Realistic is relative and often these folks are sitting on property that can be developed (which should be good for the various micro economies of the LOS). Good for the bank and good for the buyers.

[ovenman]

Realistic is relative and often these folks are sitting on property that can be developed (which should be good for the various micro economies of the LOS).    Good for the bank and good for the buyers.

I don't disagree with you but from what I understand, the banks don't see the situation this way. If the banks consider themselves to be in the hole three million baht on a property worth maybe half that, they would rather sit on that property for an eternity than take one satang less than the three million (an oversimplification obviously, but...)

[Heng]

No, you're right about that. IMO, that's the general mindset of most land owners here as well. They can afford that way of thinking because land will forever increase in value, and buyers are often willing to pay list price or even at a premium for choice properties or properties with good potential.