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GH Bank eyes 8% rise in 2014

Demand in the provinces is strong; state lender may lower interest rates this week

The Government Housing Bank (GH Bank) targets new mortgage lending of Bt130 billion in 2014, up by 8 per cent from this year, as it foresees more demand for homes driven by government infrastructure mega-projects and the approach of regional integration.

But more immediately, the bank may lower its interest rates this week in line with the recent cut in the policy rate by the Bank of Thailand.

Bank president Angkana Pilun-Owad Chaimanat said GH Bank had a positive outlook on continuing growth next year, thanks to expected higher demands for mortgages, particularly in the Northeastern region.

For this year, the bank is confident of reaching its mortgage target of Bt120 billion, after achieving Bt119 billion by the end of last month.

She said that given the challenges faced by the country this year, including a slowing economy and escalating political tension, the bank had been quite successful. Its mortgage lending should continue to increase above the average growth of the market, which is expected to be 5 per cent. Middle-income people are tending to invest more on property as interest rates go down, she said.

Angkana said the bank foresaw stronger demand from investors, especially in border provinces as they get ready for the full launch of the Asean Economic Community in 2015.

According to a study by the bank, property investors and individual home-buyers will increasingly focus on border provinces and economically active areas such as in Chiang Mai, Nong Khai, Prachuap Khiri Khan, Phetchaburi, and much of the Northeastern region. Besides access to neighbouring countries, these areas should benefit from the government's planned Bt2-trillion transport-infrastructure project, including high-speed rail service.

Angkana said the bank will add 12 new branches nationwide in 2014, after adding 25 branches this year.

In the first three quarters of 2013, the bank reported earnings of Bt91.11 billion, up by 20.9 per cent year on year. Its outstanding loans rose by 2.45 per cent to Bt723.3 billion, while its net profit reached Bt6.22 billion.

Its assets increased by 3.14 per cent to Bt759.09 billion and deposits by 3.29 per cent to Bt590.01 billion.

Its non-performing loans dropped to Bt48.5 billion or 6.71 per cent of the total from Bt54.44 billion, down 10.85 per cent year on year. The bank is projected to cut its NPLs to 6.35 per cent of total loans this year.


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