GH Bank launches new model to woo high-income earners
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THE GOVERNMENT Housing Bank (GH Bank) has created a new housing loan model with housing developers to guarantee service quality as part of its strategy to expand its customer base from middle- to high-income earners.
It hopes the model will help mix the portfolio of social solutions for customers and business solutions customers, and the middle- to high-income group will improve |the quality of loans and ensure healthy margins in the long run, GH Bank President Chatchai Sirilai said.
The new model, called Premier Service Centre (PSC), which kicked off on June 27, will guarantee its service to customers of property developers.
Further, it will upgrade the training of the bank’s sales staff to deal with housing developers’ sales staff. Under the PSC, GH Bank will offer tailor-made loans to the developers to offer to their buyers.
The bank is joining hands with six developers and it aims to issue new loans of Bt30 billion per year. GH Bank’s annual lending is around Bt170 billion.
At present, customers from social solutions such as the Pracha Rath or housing loans to government officers account for 30 per cent of the total loan portfolio.
The bank’s margin is quite low from social solutions, he admitted, and added that the bank expects to miss its net profit target of Bt9.5 billion this year.
Even the major loan portfolio is business solutions customers who borrow for buying homes worth around Bt2 million.
The bank wants to have a higher share in housing priced at more than Bt3 million.
Hoping to cut NPLs
Getting high-income earners to the portfolio will help lower the bank’s non-performing loans (NPL). GH Bank’s NPLs peaked at 5.8 per cent in April.
It hopes NPL by the end of this year will drop to 5.25 per cent.
In the first four months, NPLs increased by Bt1 billion before declining to Bt300 million in May. Most NPLs are home-loan borrowings, not exceeding Bt2 million.
An increasing number of NPL customers are turning to the floating rate, he explained.
In the first five months, GH Bank booked new loans of Bt64.2 billion, which was Bt18 billion higher than in the same period last year thanks to tax incentives.
The total loan portfolio at present is Bt880 billion. It expects the portfolio to reach Bt900 billion by the end of this year, partly contributed by the Pracha Rath housing scheme worth Bt10 billion.
The Pracha Rath scheme was introduced in April and GH Bank so far has lent Bt5 billion. Chatchai said the bank would be able to hit the Bt20 billion target this year.
