State-owned GH Bank plans to further raise the value of its low-rate mortgage scheme by 20 billion baht to 68 billion to serve strong demand, its chief says.
GH Bank's Home For All, which charges interest of 2.9% for the first three years, was first increased to 48 billion baht from 20 billion originally planned, but the housing loan application value has amounted to 68 billion, president Chatchai Sirilai said.
The bank will propose the board approves the increase of the mortgage amount to 68 billion baht to match the application value, he said, noting that the loan applicants must enter mortgage contracts with GH Bank by Dec 29.
The 68-billion-baht loan is expected to be sufficient as some applicants might not be qualified for the industry's cheapest mortgage scheme and the state-run mortgage lender can reallocate the loan amount to those who apply later, he said.
The Home For All loan scheme's borrowers are subject to minimum retail rate (MRR) minus 3.85 percentage points, equivalent to 2.9% based on the bank's current MRR of 6.75%, for the first three years and MRR minus 1 percentage point for the remaining period of the loan term for employees of companies for which GH Bank offers special conditions, or MRR minus 0.5 percentage points for general borrowers.
The bank offers a 1% mortgage fee waiver and exempts 0.1% in front-end and appraisal fees.
With strong demand in Home For All loan scheme, Mr Chatchai is confident that the bank's lending target of 178 billion baht this year is achievable.
GH Bank already lent 155 billion baht as of Nov 26.
For its 2018 loan growth target, the bank is in the process of setting a target but its growth is expected to be 5 percentage points higher than this year, he said.
At the end of September, the bank's outstanding loans rose by 4.67% from the end of last year to 980 billion baht.
GH Bank's non-performing loans stand at 4.61% of its outstanding loans, down from 5.29% at the end of September.
The decrease was largely attributed to its recent sale of 6.97 billion baht in bad loans with more than three years of late payments to Bangkok Commercial Asset Management.
The bank aims to cap its bad loan ratio at 4% next year.
Mr Chatchai recently said the lending rate is likely to rise by no more than 25 basis points next year, but GH Bank will try to maintain its interest rate for 6-8 months after commercial banks' rate increases to alleviate the financial burden on its customers. All specialised financial institutions have agreed that their chief financial officers will hold a meeting before raising interest rates.