GSB to double its mortgages to Bt22 billion

The bank anticipates the new government will put a policy priority on helping people to own houses. It will focus its new target on state officials, Worawit said, adding that municipal workers will be also favoured by bank's new policy if they want to construct buildings or market them to the community.

The bank will offer a three-year fixed rate, he said.

Woravit predicted other banks would also focus more on the mortgage market as it has lower risks than commercial loans.

The GSB plans to lend total new loans this year worth Bt134 billion, 90 per cent of which will be allocated to retail borrowers.

Asked whether the bank will cut interest rates after the US Federal Reserve recently cut its policy rate by 75 basis points to 3.5 per cent, Woravit said the bank must wait for the Bank of Thailand's move on the interest-rate trend.

The bank will also sell homes foreclosed from borrowers who failed to pay back mortgages. The value of those homes will be Bt400 to Bt500 million.

The bank will also further lend to low-income groups under the People's Bank scheme. The micro-credit scheme has loaned Bt6.8 billion, with bad loans worth Bt1.2 billion.

The rate of doubtful loans or non-performing loans (NPLs) may be high but outstanding loans are not, said Worawit. The GSB has implemented the micro-credit scheme for the last seven years since it was initiated by the Thaksin government.

The bank's total NPL rate is 4.06 per cent of outstanding loans and the bank will try to maintain this rate, Worawit said.

Wichit Chaitrong

 The Nation