GHB sets lower target for lending growth
The Government Housing Bank (GHB) is showing a more conservative approach to its lending target for next year by aiming for a figure below Bt100 billion for the first time in three years.
The lower target follows Finance Minister MR Pridiyathorn Devakula's request that the bank focus more on quality than on quantity, GHB president Khan Prachuabmoh said yesterday after the government officially renewed his term in office. The state-owned bank has lent more than Bt100 billion in each of the past three years. Khan estimated the bank would issue new loans at a rate of about Bt7 billion per month next year, down from Bt8 billion to Bt10 billion a month in recent years. "Next year will be a year for cleaning up the bank," Khan said. "We will concentrate on improving the core banking system, staff efficiency and loan-scrutiny standards, as well as solving [the problem of] non-performing loans (NPLs). We'll also build up our branch image." The GHB expects to open a number of micro-branches in department stores and shopping centres next year, because each branch of this type costs Bt2 million to Bt3 million, whereas new full branches cost between Bt20 million and Bt30 million. Khan said, however, that there would not be many new branches, because the GHB did not concentrate on extending loans. "The bank's net-interest spread will be raised marginally, from 1-1.8 per cent at present to a figure still under 2 per cent, because the finance minister wants the bank to be a financial institution that helps people own their own homes," he said. The GHB's bad loans will shrink from Bt29.64 billion, or 5.89 per cent of its outstanding credit as of the end of last month, to 2 per cent after the bank applies the IAS39 international accounting standard. The new standard stipulates the setting aside of provisions equal to the full amount of NPLs but only after the value of collateral has been deducted from the level of the loans. The bank is also considering a change to the fourth-round housing-loan package it will offer to members of the Government Pension Fund. In previous packages, the GHB offered a fixed rate for the first three years and then a floating rate equal to its minimum retail rate minus 2.25 per cent for the rest of the loan term. It is thinking of increasing the interest rate by making the floating rate equal to its minimum retail rate minus 1 per cent or 1.5 per cent. GHB's current minimum retail rate is 7.75 per cent.
Somruedi Banchongduang The Nation
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