GHB aims to dump B14bn in bad loans

State-run GH Bank aims for 6% growth in new loans for this year and plans to cut its bad-loan ratio to 4% or lower, largely by unloading 14 billion baht worth of nonperforming loans (NPLs).

The bank also aims to offer new mortgages to the tune of 178 billion baht, of which 65% will go to regular housing loans and 35% to state-sponsored initiatives, said president Chatchai Sirilai.

The state-owned housing lender’s new loans amounted to 168 billion baht in 2016, up 7% year-on-year but below its 8% target, Mr Chatchai said, adding that the new loans were extended to 143,041 borrowing accounts.

The bank’s outstanding loans rose by 8.6% to 936 billion baht at the end of 2016.

Mr Chatchai said this year the bank wants to achieve 28.8% market share of overall outstanding housing loans by offering loans that meet demand from all segments, and also digitise its services to better serve its customers and lower operating costs.

He said the bank aims to lower its NPLs to 3.9-4% of its total loans at the end of this year from 5.06% over the same period last year. GH Bank’s bad loans totalled 47 billion baht at the end 2016.

As part of its efforts to reduce NPLs, the bank plans to sell 14 billion baht of NPLs by the end of this year after it wins the Finance Ministry’s approval, he said.

Discovery Management Co Ltd has been appointed as a financial adviser for the NPL sales.

“With debt restructuring, the bank’s NPL ratio is expected to fall to 4.85%, while the divestment of 14 billion baht worth of NPLs will further lower the bank’s NPLs to below 4%,” Mr Chatchai said.

GH Bank’s goal is for net profit to reach 11 billion baht this year, up from 9.6 billion in 2016. Last year’s net profit surged by 10.3% from 8.7 billion baht in 2015.

At the end of last year, the bank’s capital adequacy ratio stood at 15.2%, well above the Bank of Thailand’s minimum requirement of 8.5%.