The small Kiatnakin Bank (KKP) has shifted its focus to extending project finance to large property developers.
The move is aimed at mitigating potential risk amid the weak economic recovery and purchasing power plagued by swelling household debt.
The bank began expanding into the large corporate customer base this year to maintain performing assets and gradually push into project finance for residences.
A competitive rate is its main strategy in driving loan growth.
Kiatnakin Bank expects 15% growth in its property-related lending this year due to its small base, said Sarawut Charuchinda, first executive vice-president for commercial lending.
Property-related loans outstanding total 27.2 billion baht, all of them extended to small and medium-sized developers.
Commercial loans account for 26% of the bank's total lending at 185 billion baht.
Retail loans amounting to 130 billion baht or 70.1% of total credit dominates Kiatnakin Bank's lending portfolio, and automobile loans totalling 124 billion represent the bank's biggest portion of retail loans.
Non-performing commercial loans stand at 10% of total commercial loans of 48.1 billion baht.
Even though Kiatnakin Bank has concentrated much more on large property developers, small and medium-sized enterprises (SMEs) remain its focus.
With the pre-emptive measures, the bank will lend only to existing and new borrowers with presales of 30-40%.
It also caps borrowers' debt-to-equity ratio at 2-3 for low-rise projects and 3-3.5 for high-rise ones.
"Some SME developers have lower debt-servicing ability due to the sluggish economy," Mr Sarawut said.
"The bank then needs to monitor them closely to provide financial assistance immediately in order to prevent their debts from turning sour."
None of the SME developers has asked the bank for debt restructuring this year.
Despite the lacklustre economy, loan demand for residential projects remains solid.
The bank estimates the combined value of new residential projects located in Greater Bangkok will surge 17% to 400 billion baht this year.
Pent-up demand delayed from last year's political chaos and the expansion of urbanisation alongside the mass-transit system are expected to underpin the growth in residential projects' value.
KKP shares closed last Friday on the Stock Exchange of Thailand at 38.50 baht, down 50 satang, in trade worth 65.4 million baht.