Government Housing (GH) Bank still plans to expand mortgages even as interest rates remain elevated, says director and acting president Krit Sesawet.
As of Sept 19, GH Bank had extended new loans worth 162 billion baht, 69% of the total lending target of 235 billion it set for this year.
The bank anticipates beating the target by the end of this year.
For next year, the bank expects to extend more housing loans than this year as consumer confidence rises as a result of a new government forming and stimulus measures to help ease the cost of living, such as reducing energy prices for diesel and electricity.
Mr Krit said interest rates have risen since last year, with the Bank of Thailand's Monetary Policy Committee raising the policy rate seven times during that period. As a state bank, GH Bank has been the slowest to raise its lending rates, he said.
The bank has only increased its loan rates three times. Although there is still great uncertainty regarding rates, the bank plans to maintain its current loan rate for as long as possible, said Mr Krit.
GH Bank wants to lower its non-performing loans (NPLs), mainly through debt restructuring. To date, 170 billion baht worth of debt has been restructured by cutting interest rates and reducing monthly instalments.
As a result, 79% of customers who entered the debt restructuring programme have been able to return to the status of regular debtors.
The bank's NPLs tallied 71.3 billion baht as of Aug 31, up 0.57% from the end of last year, accounting for 4.31% of total outstanding loans. This level of NPLs is considered low, he said.
In the first half of this year, the bank's NPLs did not increase.
Over the past 70 years, GH Bank has fulfilled its policy role of providing low-rate loans for housing, extending mortgages to 4.4 million customers, said Mr Krit.
The bank's outstanding loans to date total 1.65 trillion baht, up 3.74% since the end of last year.
The bank maintains a strong financial position, with a reserve for doubtful debt of 140 billion baht, accounting for 197% of NPLs, and a Bank for International Settlements ratio of 15.1%, higher than the Bank of Thailand standard of 8.5%.
As GH Bank shifts to become a green bank, in line with the government's sustainability policy and global trends toward low-carbon economies, he said the bank has extended loans that take into account the environmental impact worth 9.03 billion baht, representing 120% of its target of 7.5 billion.
The bank also extended loans to real estate developers called "Project Loans for Carbon Reduction Building" to develop energy-saving houses.
Seven developers have participated in the programme with total lending worth 259 million baht, while the target is 900 million baht. Nine more developers are in the pipeline, which could be worth 850 million baht, said Mr Krit.