The Government Housing Bank (GHB) announced that in the second quarter of 2020, it issued new loans exceeding 100 billion baht, an increase of 12.99% compared to the same period last year. Total deposits reached 1 trillion baht, up 6.76%. The Non-Performing Loan (NPL) ratio stands at 4.52%, indicating that the Thai economy continues to face challenges from the ongoing COVID-19 pandemic. As a result, GHB has revised its operational targets for 2020.

Showcasing First Half Performance with Over 100 Billion in New Loans

         Mr. Chatchai Sirilai, Managing Director of the Government Housing Bank (GHB) revealed the bank's performance for the second quarter of 2020, stating that the Thai economy has been significantly impacted by the COVID-19 outbreak since the beginning of the year, affecting both the global and Thai economies more than anticipated. However, GHB, as a state financial institution with the mission to “provide homes for Thai people,” has implemented measures to assist customers in mitigating the impact while also stimulating economic recovery as the pandemic begins to ease.

        As of June 30, 2020, GHB successfully issued new loans totaling 100.981 billion baht across 62,116 accounts, representing a 12.99% increase from the previous year, achieving 50% of its new loan target for 2020 of 210 billion baht. In the first six months of 2020, the bank issued new loans not exceeding 2 million baht for low- and middle-income earners, totaling 40,504 individuals.

        Consequently, by the end of the second quarter of 2020, compared to the end of 2019, the bank's total outstanding loans amounted to 1,256.305 billion baht, an increase of 3.89%. Total assets reached 1,300.881 billion baht, up 4.52%, and total deposits were 1,060.970 billion baht, an increase of 6.76%.

       The Non-Performing Loans (NPL) amounted to 56.827 billion baht, representing 4.52% of total loans, an increase from 4.09% at the end of 2019, or an increase of 0.43%. The bank reported a net profit of 4.831 billion baht, which is 14.87% below target due to increased provisions for stability and preparedness for future uncertainties, as well as support measures for customers affected by COVID-19 through the GHB program to assist Thai citizens in nation-building, which includes measures such as loan payment deferrals, interest payment suspensions, and interest rate reductions.

       As of July 16, 2020, at 9:00 AM, 490,725 accounts had expressed interest in the assistance measures, with a total loan amount of 488.024 billion baht. Meanwhile, the capital adequacy ratio (BIS Ratio) remains strong, standing at 15.35% as of May 31, 2020, which is above the minimum capital requirement set by the Bank of Thailand.

 

“The main reason for the continued growth in new loans is the low-interest rates and promotional campaigns to stimulate housing project sales, providing a great opportunity for citizens unaffected by COVID-19 to acquire housing,”

“Additionally, government support measures through various programs, such as GHB's housing loan program with a total budget of 50 billion baht at a fixed interest rate of 2.5% for the first three years, have seen 27,870 loan approvals, fully utilizing the 50 billion baht budget. The 'Good House with Down Payment' project supports down payments of 50,000 baht per individual, with 19,549 citizens having received the transfer already.”

“Meanwhile, the 'Million Houses' project, which the Cabinet has approved to adjust criteria and conditions for retail customers, has increased the purchase price and loan limit to not exceed 1.2 million baht from the previous 1 million baht. So far, 29,931 customers have been approved for loans totaling 21.362 billion baht under the 50 billion baht project budget for 2021.”

 

Reducing New Loan Targets - Adjusting Profit Targets - Increasing Provisions

        The Thai economy in the second half of the year continues to face challenges from the ongoing COVID-19 pandemic. Therefore, the Ministry of Finance has allowed state enterprises to revise their operational targets for 2020. The bank's board has approved a reduction in the new loan target from 210 billion baht to 170 billion baht, and the net profit target has been reduced from 13.177 billion baht to 8.227 billion baht.

        This aligns with the increased provisions to prepare for the situation of Non-Performing Loans (NPLs) after the bank's customer assistance measures for those affected by COVID-19 end on October 31, 2020, especially for customers who have deferred principal and interest payments. In August, or before the end of the 30-day assistance period, bank officials will gradually contact customers to gather information for assessing future repayment capabilities and finding ways to assist customers in returning to normal account status as much as possible.

“Regarding personnel and branches, the bank confirms that there are no plans to reduce the number of employees or operations, which currently number over 5,000, nor to close any of the more than 200 branches nationwide. Instead, the focus will be on enhancing staff capabilities to better support new service models.”

“We believe that if the COVID-19 situation continues to improve, the bank will be able to issue new loans to help citizens acquire their own homes of no less than 170 billion baht, or close to the original target of 210 billion baht, to stimulate the Thai economy for a quicker recovery.”

 

Source: Government Housing Bank (GHB)