GH Bank sees big demand for mortgages upcountry
The Government Housing Bank believes that the overall market for housing loans this year is still strong, especially as the approach of the Asian Economic Community (AEC) fuels demand in the provinces.
GH Bank president Angkana Pilun-Owad Chaimanat says it will strive to maintain its leading market share, hoping to extend about Bt120 billion in mortgages to low-to-medium-income clients this year. That is an increase from Bt104 billion last year.
Slightly over 90 per cent of GH Bank’s clients are in the low-to-medium-income group.
The bank’s current outstanding loans are about Bt730 billion, with total assets of Bt735 billion. It targets total deposits of Bt594 billion and net profit of Bt8.1 billion.
GH Bank aims to extend more loans to low-income clients in line with deposits, which tend to be from the same client group, to ensure stability of the deposit base.
The bank plans to add 20-25 branches this year.
GH Bank hopes to lower its rate of non-performing loans to 5 per cent of total outstanding loans, slightly down from the current figure of 6 per cent.
It plans to be more aggressive in managing its NPLs, and more competitive in offering attractive interest rates, while improving the quality and efficiency of management to keep clients satisfied amid growing competition from commercial banks, which view mortgages as a quality lending business.
The Northern and especially the Northeastern region accounted for strong growth in housing loans. In Khon Kaen province, growth was particularly strong, driven by the approach of the AEC in 2015, which property developers expect to bring demand for housing in provinces close to neighbouring countries.
The AEC is expected to benefit growth of the housing sector, especially in border provinces, pushing up land prices, while boosting trade and investment to support infrastructure developments that will open up more gateways with neighbouring countries.
As for the Bank of Thailand’s concern about excessive lending growth, GH Bank is confident in its cautious lending policy. Housing loans at the moment are derived from real demand, not speculation, Angkana said.
Moreover, mortgages are backed by collateral, making them relatively less risky than other types of loans.
GH Bank has offered loan packages of zero interest for the first three years to help low-income groups own homes, which is in line with the bank’s objective, she said.
