News Column

GH Bank upbeat on loans

June 21, 2014

By Wichit Chantanusornsiri, Bangkok Post, Thailand

June 21--State-owned GH Bank's 2014 lending target of 134 billion baht is achievable based on expectations of rising mortgage demand as the economy gains momentum in the second half, says the bank's boss.

President Angkana Chaimanat said the 134-billion-baht loan target is 5% higher than last year's final figure.

The bank as of this past Sunday had extended housing loans worth 56 billion baht year-to-date.

To ensure reaching the target, the housing bank has joined forces with the National Housing Authority (NHA), a low-cost residential developer with units priced from 450,000 to 1.5 million baht.

GH Bank expects the partnership with the NHA to generate 46 billion baht in housing loans this year.

The bank wants to cash in on the fast-growing residential market in provincial areas, Ms Angkana said, adding that upcountry accounted for most of GH Bank's new loans.

The biggest customer base in terms of numbers is in Chon Buri province. In the Northeast, Khon Kaen and Udon Thani have also seen a fairly high amount of mortgages.

GH Bank is launching a 5-billion-baht mortgage package for low-income earners and offering additional credit lines through special-purpose loans to existing borrowers.

The mortgages for low-income earners will be offered to those earning no more than 15,000 baht a month, with loan amounts capped at 1.5 million baht each.

The loans charge a 3.5% interest rate in the first year, 4.25% in the second and the minimum retail rate minus 75 basis points throughout the remaining period.

For the bank's existing customers who have a good track record for at least 36 months, a 5-billion-baht special-purpose loan for home decoration is available. The rate is fixed at 3.99% for the first three years.

Despite the tepid economy in the first half, GH Bank's rejection rate was relatively low at less than 10%, Ms Angkana said.

The bank plans to keep its non-performing loans below 6% of outstanding loans this year. Bad loans now represent more than 6% of total credit of more than 700 billion baht.

GH Bank forecasts a full-year net profit of 8.3 billion baht, up from 8.18 billion last year.


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Source: Bangkok Post (Thailand)

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