GSB extends moratorium period into December
Government Savings Bank (GSB) has extended the debt moratorium period for customers affected by the coronavirus outbreak and is prepared to move into the non-bank loan business over the next six months.
The bank's debt moratorium covers 3.1 million customers, equivalent to 1.14 trillion baht worth of loans due this September.
The measure has been extended to December because businesses are still reeling from the Covid-19 impact and GSB customers' debt-servicing ability is still dampened by the ongoing crisis, said president and chief executive Vitai Ratanakorn.
The bank will let customers choose the type of debt moratorium, such as suspending principal payment and paying only interest, or only paying half of the principal amount.
For soft loans provided to small and medium-sized enterprises worth a combined 150 billion baht at 2% interest, GSB has approved a loan amount worth 136 billion baht from 14,800 borrowers.
The move into non-bank business is intended to solve the informal debt problem, Mr Vitai said. GSB also believes that existing non-bank loans charge overly high interest.
The bank will enter non-bank lending in the next six months and pull down interest rates in the market to 8-10%, Mr Vitai said.
GSB is also prepared to help non-bank customers with loan refinancing. The market rate for non-bank interest is expected to decline if the bank manages to refinance around 30,000-40,000 customers.
The bank reported a first-half net profit of 5.22 billion baht, while annual net profit is projected at 12-13 billion baht.
GSB is poised to see a lower net profit in 2020 compared with last year's 24.2 billion baht and 2018's 30.8 billion baht.