State-owned GH Bank plans to earmark 45% of its 189-billion-baht loan target for soft loan schemes in compliance with the government's policies, its chief says.
The bank will allocate 84 billion baht for loans to accommodate the government's policies through two lending schemes -- Home For All, a 2.9% mortgage for the first three years; and the Baan Pracha Rat low-cost housing project, said president Chatchai Sirilai.
He said 24 billion baht will be earmarked for Home For All loans and 60 billion baht for the three low-cost home projects comprising mortgages for those earning less than 25,000 baht a month and recipients of the government's welfare and subsidy scheme, mortgages for state enterprise officials and university staff, and loans for those who lease homes under the second phase of the Baan Pracha Rat housing scheme.
The mortgage for those earning less than 25,000 baht a month charges 2.75% interest for the first four years. The mortgage for state and state enterprise officials and university staff will offer the minimum retail rate (MRR) minus 3.75%, equivalent to 3%, for the first four years. The mortgage for the second phase of the Baan Pracha Rat housing project is expected to be 2.75%, Mr Chatchai said, adding that the first two mortgage schemes will begin on Jan 15.
Even though the state-controlled mortgage lender will not make any losses from providing housing loans to comply with the government's policies, the bank will also not profit from these projects, he said.
However, the bank can profit from the general mortgage schemes, he said.
GH Bank's mortgage outstanding portfolio amounts to 1.02 trillion baht.
Moreover, the banks has lowered its funding costs to 2.1% at present from 2.48% earlier last year, leaving the net interest margin at 2.9%.
The bank's target net profit for this year is 12.1 billion baht, up from 11.7 billion in 2017.
Mr Chatchai said that 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) were to the tune of 42.1 billion -- representing 4.21% of its total lending, and its capital adequacy ratio was solid at 14.9% of risked weighted assets.
The bank's coverage ratio stood at 158% of loan loss.
The NPL ratio is expected to decline to 4% on the back of loan quality management, and divestment of bad loans, he said, adding that the bank's NPL ratio last year fell by 0.6 percentage points after it sold 6.3 billion baht in soured loans to Bangkok Commercial Asset Management.
