By PHUWIT LIMVIPHUWAT
“There are three mortgage projects which will be introduced to support members of the grassroots economy. These are people who cannot take out traditional mortgages due to their lack of financial credentials such as a stable income,” said the bank's president and chief executive officer, Chatchai Payuhanaveechai, at a press conference in London on Sunday.
He said the projects will be discussed at the bank's board meeting on June 18 and expects the new plans to be rolled out for the public shortly after.
In 2018, GSB made a profit of Bt30.8 billion. Chatchai said he aims to maintain the bank's profits at a minimum of Bt30 billion this year through these new measures.
The first measure will be called “Save before Loan”, which will allow low-income earners to take out home loans if they have saved consistently with the state-owned bank for at least one year. “This way, the customers can demonstrate their ability to pay their mortgage interest by adding money to their savings consistently with the bank for at least one year,” Chatchai said.
For example, if the mortgage requires the customers to pay Bt7,000 a month, customers will first be required to save at least Bt7,000 every month with the bank for one year to demonstrate their ability to pay off the mortgage. If they do so, they will be able to take out a mortgage with the bank.
The second method involves the bank working with property developers. Under this strategy, Chatchai said, property developers can act as the middleman and take out loans for their customers. The customers then pay for the mortgage interest to their developers as rent for two years.
If the customers are able to pay for their rent consistently for two years, the ownership of the home will then be transferred to them and they will be able to start paying off their mortgage directly to the bank.
“The final method involves calculating the future level of income of customers based on their current occupation,” Chatchai said. “This will give customers more financial credentials and allow them to take out mortgages that they may have been previously denied.”
For the first quarter of this year, the bank reported a profit of Bt6.08 billion, with interest revenue of Bt13.9 billion. Its non-performing loans stood at 2.83 per cent, a slight increase from the fourth quarter of 2018, which was 2.81 per cent.
As of March 3, 2018, the bank’s total assets were Bt2.7 trillion, with total deposits of Bt2.3 trillion and total outstanding loans of Bt2.16 trillion.
The bank has 5.5 million users of mobile banking services, with electronic transactions making up 82 per cent of total transactions.