SCB eyes Chinese investors

Siam Commercial Bank (SCB) has set its sights on doubling its loan portfolio to Chinese investors in the next three years and launching bridge loans for them to buy land from Thailand’s three industrial estates will help it to achieve the target.

The move by the country’s third-largest commercial lender by assets is to capitalise on the surge in foreign direct investment (FDI) from China.

The bank yesterday unveiled a oneyear bridge loan programme for Chinese investors to finance land purchases from three industrial estate developers: WHA Corporation subsidiary Hemaraj Land and Development, Rojana Industrial Park, and Amata Industrial Estate.

China’s outbound direct investment is rising, said Arthid Nanthawithaya, SCB’s chief executive, and the loans also offer capital management flexibility.

SCB’s loan portfolio to Chinese investors amounts to 15 billion baht. The bank targets extending over 5 billion baht under the bridge loan programme to 50 Chinese customers over the next three years. It has around 10 deals in the pipeline with a combined credit line of 1-1.5 billion baht.

Under the scheme, SCB will offer a maximum credit line of 200 million baht to each Chinese investor who registers a company in Thailand and wins Board of Investment tax incentives.

China’s outbound direct investment to Thailand is expected to reach 100 billion baht by 2020 from 40 billion at the moment, said Mr Arthid. China’s contribution accounts for 10% of Thailand’s FDI but only 0.3-0.4% of China’s total FDI.

The bank hopes programme borrowers will also use it for long-term project financing, he said. The scheme will be offered to other foreign investors later.

SCB also has some 20 project financing deals in hand with Chinese investors in the energy, agriculture, manufacturing and real estate sectors.

Shares of SCB closed yesterday on the SET at 160 baht, down 50 satang, in trade worth 596 million baht.