NH Bank To Introduce Housing Loans With 3% Annual Interest
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NH Bank To Introduce Housing Loans With 3% Annual Interest
The new housing loan product designed to help revive the real estate market

30(Tue), Apr, 2013

President Shin Chung-sik of NH Bank attends an 

event at the bank's Gyeonggi Sales headquarters.

NH Bank will unleash housing loans with a 3 percent annual interest rate starting this month in line with the government’s integrated measures to revive the real estate and housing markets, with demand expected to rise for residential units. The special housing loans will be backed by the deeds to the houses.

The bank will further cut the interest rates by from 0.2 percent to 0.3 percent for those who want to occupy the houses they are purchasing.

The bank will also expand the pre-workout system of the household loan system to include housing loan borrowers and the private businesspeople operation fund loan. The system is intended to save those likely to default on their loans under the pre-workout system by relaxing their loan conditions including allowing the extension on the repayment periods for their loans or long-term installment repayment. The bank will also lower the age limit for receiving the NH Housing Mortgage After Retirement Pension Loans from 60 years to 50 years to help the house poor.

The bank will also take measures to help the rent-poor people, which will include making loans for the key money for rental units, which will require interest payments on those loans.

The details of the loans will be released in the first half of the year.

The bank also has a plan to help the borrowers of housing loans to recover their credit standing if they have trouble repaying the loans. The bank will sell the housing mortgages of housing loan defaulters who have not paid interest on their loans for three months to Korea Asset Management Corp. (KAMCO) and the mortgages of those who have trouble repaying the loans will be sold to the Korea Housing Finance Corp. so that they will be able to recover their credit standing.

The bank, in the meantime, announced it will expand financial assistance to help stabilize the residential conditions and the economy of the people in line with the April 1 government measures to revive the real estate market.

In the meantime, NH Financial Holdings celebrated its one-year anniversary on March 2 at a ceremony held on Feb. 28 at the NH Bank head office with officials and heads of other NH financial affiliates including NH Capital, NH Securities, NH Non-Life Insurance, and NH Bank led by NH Financial Holdings Chairman Shin Dong-kyu.

Since its spinoff from the National Agricultural Cooperatives Federation (NACF) on March 2, 2012, NH Finance has now grown to seven affiliates including NH Bank, NH Securities, and NH Non-Life Insurance with total assets of 240 trillion won, becoming the fifth largest financial group in Korea in terms of assets.

From the time of its independence from NACF, NH Finance aimed at strengthening its competitive power by managing both the banking and non-banking sectors to grow together and is kick-starting its plans to expand its overseas operations to be an integrated financial group.

NH Finance reduced the size of its central operation system to beef up the operation of its local units.

But its initial year’s operating results have not been enough to satisfy its goal. Chairman Shin, when he took office last June, claimed NH Finance would aim at securing 1 trillion won in profit during its initial year of operation.

However, net profit came to only 500 billion won -- one half of the target -- and even if the 430 billion won the company paid to NACF for the use of the NH brand name was added to that, profits still came short compared to those of its rivals including KB Financial and Woori Financial.

KB Financial’s net profit amounted to 1.77 trillion won in 2012, Shinhan Financial’s was 2.3 trillion won, Woori Financial’s was 1.6 trillion won, and Hana Financial’s was 1.6 trillion won.

Chairman Shin said this year is the year that the separation of the financial sector of NACF would have normal operations with all of its sectors working as expected. He said NH Finance’s profit target for this year is 1.6 trillion won, triple the profit of last year. He said he will see that the capital of affiliates will be revamped this year by 610 billion won with the funds provided by the issuance of 1 trillion won worth of bonds this year.

NH Finance launched its New York branch last year and opened its operational bases in such countries as Vietnam and China to spur its overseas advancement. Early this year the financial holding company slimmed its manpower at its head office to beef up personnel at business units in local regions.

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