AMID AN economic slump and rising household debt, the rate of non-performing loans at Government Housing Bank reached 6.35 per cent in February, compared with the 2013 average of 6.12 per cent.
NPLs increased from Bt45 billion as of December 31 to Bt47 billion as of February 28, the bank’s president Angkana Pilanovat Chaimanus said.
However, the bank will try to keep the NPL rate below 6.5 per cent as its outstanding loans reach about Bt800 billion by the end of the year. Outstanding loans stood at about Bt765 billion as of March 31, she said.
The state-owned bank has proposed to the Finance Ministry’s Fiscal Policy Office the sale of Bt10 billion worth of NPLs to asset-management firms this year.
Meanwhile, the bank is considering reducing its interest rates after the central bank cut the policy rate by 0.25 percentage point on March 12.
Angkana said GH Bank had maintained its target for new mortgages at Bt130 billion this year despite sluggish growth of the economy. It will focus on first-time home-buyers and the middle-income market.
In the first quarter, the bank recorded new mortgages worth Bt29 billion, up 7.4 per cent from Bt27 billion in the same period of last year. Chatchai Sirilai, GH Bank’s senior executive vice president for credit business, said its housing-loan growth exceeded commercial banks’ as its customers opted for costlier homes than last year, while the number of customers was also on the rise.
“We have continued to approve new mortgages with a rejection rate of only 6 per cent, which is lower than that of commercial banks,” Chatchai said.
To support its business growth this year, yesterday the bank signed an agreement to offer zero interest for the first seven months of mortgages taken by members of the Government Pension Fund. To be eligible, GPF members must apply for the mortgage before December 30 and sign a loan agreement with the bank by March 31 next year.
“We target new mortgages from GPF members at less than Bt3 billion from this programme,” Angkana said.
This is the 10th time this programme has been offered. Since the first one in 2001, GH Bank has provided housing loans to GPF members worth a total of Bt83.84 billion. Of the fund’s total membership of about 1.2 million, 214,212 have taken advantage of the programme.