State-owned GH Bank's savings certificates, with a ticket price of 1 million baht each, are expected to be oversubscribed by up to 85%.
The 27-billion-baht savings lottery Wimarnmek has already been oversubscribed and the reservation amount is estimated to reach 40-50 billion baht after the subscription period ends Aug 15, said GH Bank president Chatchai Sirilai.
With the huge demand, the bank plans to make a random drawing on Aug 19 of the prize-linked savings' buyers, he said. Those who fail to subscribe will be entitled to purchase the bank's new batch of savings certificates worth an estimated 10-20 billion baht.
The new lot of GH Bank's savings lottery, dubbed Wimarnmek 2, is expected to be sold later this year.
Mr Chatchai said Wimarnmek's savings certificates offer 1.4% per year to those who hold them until the maturity at three years.
Holders will be charged a mere 1% of the 1-million-baht ticket price or 10,000 baht for early withdrawal after holding for less than three months.
The bank's savings certificate holders are not subject to a charge for early withdrawal after holding money from three months to one year.
Those who redeem a certificate after holding it for one year but less than three years are entitled to a 1% interest rate per year.
GH Bank's prize is set at a flat 200,000 baht, with 27 prizes per month. Throughout three years, there are 927 prizes and the probability of winning a prize is 0.1%.
Mr Chatchai said the likelihood of a savings certificate holder winning a prize is 0.1%, well above the odds of winning the top prize in state lotteries (0.0001%).
Proceeds from the savings certificates will be used for mortgage lending with a fixed interest rate in the range of 2.5-2.75%.
Savings certificate issuance gives the bank a longer-term funding source at lower cost, Mr Chatchai said.
The bank's current operating costs stand at 2.1-2.2%, while savings certificates cost 1.8%.
Cheap housing loans could be extended to homebuyers who seek a mortgage in a range of below 3 million baht to 5 million baht, Mr Chatchai said. Eligible applicants are new borrowers and those refinancing from other mortgage lenders.
Apart from the two batches of Wimarnmek savings lottery, GH Bank plans to issue 30 billion baht in savings certificates priced at 10 million baht each and a further 50 billion baht in prize-linked savings priced at 50,000 per ticket.