SMC looks to large increase in mortgage portfolio purchases from banks next year
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Target set at Bt30 bn; signings of MOU with eight expected
Secondary Mortgage Corporation plans to purchase Bt20 billion to Bt30 billion worth of housing loans from commercial banks next year, up from the Bt10 billion expected this year, said SMC president Pornnipa Hachaiyaphum.
She said her office was in talks with seven or eight banks, of which five were expected to sign memoranda of understanding with SMC.
Year to date, the state-owned SMC has purchased housing-loan portfolios worth Bt6.4 billion and it plans to purchase another Bt3 billion to Bt4 billion worth this quarter, bring the total to Bt10 billion, double the previous target of Bt5 billion.
SMC recently joined with Tisco Bank to launch mortgages with fixed interest rates for the first 10 years, the longest term in the banking industry. In general, Thai banks offer fixed rates for only the first three years and then a floating rate through the end of contract.
She said that Tisco would act as lead analyst to approve lending, after which it would sell the mortgage portfolio to SMC based on the quality of assets and criteria of the corporation.
“The Tisco mortgage portfolio to be sold to us does not show non-performing loans as its customers handle their finances well. Most customers have selected a fixed rate for the first seven years, which shows that the campaign has had a good response,” Pornnipa said.
SMC and the Japan Housing Finance Agency are jointly studying the feasibility of mortgages with fixed interest rates for 35 years, which is a model that has been used in Japan.
Pornnipa said SMC this year was expected to earn net profit of Bt80 million, of which Bt30 million will be set as the general reserve to ensure the security to the office.
Total assets at SMC were Bt16.34 billion.
SMC is laying out a strategy to mobilise funds through mortgage-backed securities next year after its latest five-year MBS offering worth Bt4.08 billion, with a rate of 4.25 per cent per annum, was overwhelmingly subscribed by institutional investors.
