State-owned GH Bank expects its mortgage lending growth and net profit to surpass this year's targets because of higher borrowing after the bank announced that it would maintain low rates despite commercial banks starting to raise their teaser rates.
The bank estimates that its housing loan extensions will average 17-18 billion baht a month for the final quarter and that total new loans this year will exceed 200 billion, above its target of 189 billion, said president Chatchai Sirilai.
He also forecasts GH Bank's net profit to outpace the 2018 target of 12 billion baht.
For the eight months to August, the state-backed mortgage lender lent 140 billion baht and delivered a net profit of 7.4 billion.
The announcement that GH Bank is maintaining rates has attracted more mortgage applicants, Mr Chatchai said.
The bank's campaign offering low-rate mortgages and free collateral appraisals, front-end fee and registration has also motivated new borrowers.
Some existing customers still refinanced with other banks as competition intensified in the housing refinancing market, Mr Chatchai said.
Refinancing with GH Bank from other banks averaged 1 billion baht a month, exceeding the 800-900 million that was refinanced with others.
GH Bank said recently that it would maintain its interest rate until year-end regardless of whether the central bank starts normalising its monetary policy, leading commercial banks to follow suit.
The bank's 60-billion-baht loan allotment for the imminent 1-million-unit low-cost government housing scheme is expected to be another driver of loan growth this year.
The housing programme is expected to seek cabinet approval for inclusion in public service accounts by this month, Mr Chatchai said.
Of the 60 billion baht, 10 billion is project financing for property developers to build residential projects, of which at least 40% are to be sold at a price tag of up to 1 million baht per unit, with the remaining 50 billion for mortgages.
The 10 billion baht in pre-financing carries an interest rate of 1.25 percentage points minus the minimum lending rate.
