Banks are mapping out strategies to garner a larger slice of the home loans market as intense competition continues to exert downward pressure on interest rates.
CIMB Bank Bhd head of retail banking Peter England said: “There certainly has been a significant increase in competition in the Malaysian banking sector in recent years and this has translated into significant cost savings for customers.
“At the same time, we are also focusing heavily on improving our customer service, not only during the initial sales process, but also throughout the whole tenure of the loan.”
He felt that as the pricing among banks settled down to a certain level, those with the best service and overall bundled product proposition would be the most successful.
Instead of burdening customers to visit banks, he said the bank's mobile sales officers would visit customers in their homes or offices to offer home financing.
According to England, cross-selling is another strategy to boost its home loans business. This involves selling home financing to the bank's existing five million customers with savings and current accounts.
In addition, he said the bank believed its innovative products would also help expand market share in this sector.
“For example, at CIMB Bank we recommend customers to opt for fixed rate loans to avoid having to pay a higher rate if there is a hike in the interest rates (overnight policy rate and subsequently the base lending rate).
“We can offer just about any fixed rate to clients, but typically recommend three, five or 10 years' fixed rates,” he said in an interview.
An increasingly popular home loan product is Home Flexi, which allows customers to make additional repayments and draw back these payments at any time with the convenience of a cheque book.
England added that the bank had even combined convenience of a flexi loan with the comfort of a three-, five- or 10-year fixed rate.
CIMB Bank also had a complementary range of Islamic home financing packages available via its mobile sales force and at its 362 CIMB Islamic branches nationwide.
CIMB Bank's current market share in this sector is over 10%, hence making it the third biggest player in the home loans business in the country.
Standard Chartered Bank Malaysia Bhd (StanChart) general manager for consumer lending Francis Loh said the bank viewed itself as a product innovation leader and would continue driving this strategic differentiator.
“Moving forward, we will combine product innovation with our strategy to lead the industry in customer experience. We will focus on delivering superior customer experience and being relationship-focused when providing our advisory expertise.
“Expect a key product innovation based on a new pricing convention soon. Watch this space!'' Loh noted.
The bank's MortgageOne, launched in 2001, remains one of the strongest and most attractive for home-owners.
MortgageOne and its enhancers – Low Start and Optimizer – combine a loan account with any deposit account (savings or current). Any deposit in these accounts is used to reduce the outstanding loan amount and saving interest paid.
StanChart's mortgage business last year stood at over RM13bil and for this year, it aims to grow its market share by 8%.
Citibank Bhd director for mortgage business Goh Ching Chee said understanding customers' needs was paramount and enabled the bank to introduce a full range of products that met the evolving needs of customers, based on their lifecycle.
“We believe in giving customers competitive interest rates and given the flexibility of our products, we are able to meet the varied needs of customers at different segments of society as well as cater to their changing needs and lifestyle,'' he added.
For example, for first time house buyers, the bank's Citibank Home Partner-i financing package not only offered a very competitive financing rate but also came with a cap on how high their financing rate could go, he said. This helped ensure affordability and peace of mind for the customers, he added. - By The Star
No comments