Bank SinoPac (永豐銀行), the flagship banking unit of SinoPac Financial Holdings Co (永豐金控), aims to improve the development of its consumer banking business and is planning new financial products to engage younger clients.
The bank on Thursday announced it would be providing a new, fully amortized 40-year home loan with an interest rate starting at 1.9 percent to better meet the needs of young people looking to buy their first home.
“Through a longer-term loan, young people have the option to buy a home earlier, while maintaining an acceptable quality of life,” Bank SinoPac president Tina Chiang (江威娜) told a media briefing.
Citing data provided by the Ministry of the Interior in the fourth quarter last year, Bank SinoPac said more than half of the buyers in the residential property market were first-time buyers, indicating that most Taiwanese, even young people, still prefer owning a home to renting one.
However, increases in disposable income, which showed 3 percent growth in Taiwan over the past five years, was far lower than the 50 percent climb in property prices in the same period, the bank said in a report.
This has resulted in home loans becoming more of a burden and lowered quality of living for home buyers.
Chiang said the 40-year home loan offered by Bank SinoPac might help home buyers save NT$20,000 on their monthly installments for a 20-year loan.
Ting Chen (陳亭如), who heads the bank’s electronic banking and integrated marketing divisions, said the program would help Bank SinoPac maintain steady growth momentum in the home-loan sector, which accounts for about 30 percent of its total loan business.
“The bank currently receives billions of New Taiwan dollars per month from home loan customers and we hope the introduction of the 40-year home loan will help maintain the amount,” Chen said.
Bank SinoPac is not the first bank in Taiwan to offer a 40-year home loan option, with Taiwan Cooperative Bank (合作金庫銀行) — the banking arm of Taiwan Cooperative Financial Holding Co (合庫金控) — and DBS Bank (Taiwan) Ltd (星展銀行) also providing similar programs.
However, Bank SinoPac’s move exhibits its focus on offering financial services for lower-to-middle-income young people, to improve its position in the nation’s banking industry.
SinoPac also launched various financial products applicable for small investments starting from NT$100 per day, such as selected time deposits and fund products, in a bid to integrate the bank’s resources and improve services to younger clients.
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