State-owned GH Bank plans to unveil additional mortgage schemes with interest rates below 3% after strong demand from low- and middle-income earner groups.
The bank is still mulling interest rates for the new mortgage packages, but they will not exceed 2.9%, said president Chatchai Sirilai, adding that cheap housing loans are expected to be available by the middle of the year.
GH Bank charges the lowest mortgage rate at 2.9% for the first two years, and the scheme will expire this month.
With the strong demand for the low-rate mortgage package, the bank managed to raise its new loans by 17% to 196 billion baht year.
Mr Chatchai said the cheap mortgage loan offer is intended to comply with the bank's mission to help people, especially low- and middle-income earners, own their own homes.
The bank's current low-rate mortgage package is 0.25 percentage points below the industry average, he said.
Even though the gap appears to be small, it can help borrowers, particularly low- and middle-income earners, reduce interest expenses by 700-800 baht a month, he said.
The low-rate mortgage scheme narrows the bank's net interest margin (NIM) to 2.9%, but GH Bank managed to achieve its net profit target.
The state-run mortgage lender targets a net profit of 12.1 billion baht this year, up from 11.7 billion last year.
The bank further targets 189 billion baht in new loans for 2018.
The bank lent 197 billion baht in mortgages last year, up 17% from the end of 2016 and exceeding the target by 18.5 billion.
At the end of 2017, GH Bank's total assets surged by 8.7% to 1.06 trillion baht, its deposits soared by almost 10% to 858 billion, non-performing loans (NPLs) came to 42.1 billion -- representing 4.21% of total lending -- and capital adequacy ratio was solid at 14.9% of risked weighted assets.
The bank's coverage ratio stood at 158% of NPLs.
The NPL ratio is expected to decline to 4%.
GH Bank extended 14 billion baht in housing loans for January, doubling year-on-year.
