LH Bank to double assets

Land and Houses Bank (LH Bank) aims to double its asset size by 2020 following a tie-up between its holding parent Land and Houses Financial Group (LHFG) and Taiwan’s CTBC Bank in a deal worth 16.6 billion baht.

The asset increase target is part of the Thai bank’s three-year business plan, starting from 2018, LH Bank’s senior executive vice-president Sutharntip Phisitbuntoon said.

CTBC is scheduled to inject fresh fund to acquire newly issued shares of LHFG in September this year after receiving an approval from Taiwan’s regulators and the Bank of Thailand, she said.

Under the deal, the Taiwanese bank will acquire 7.55 billion newly issued shares or a 35.6% of LHFG at a price of 2.20 baht each.

“We plan to double assets to create economies of scale and strengthen our competitiveness. Size matters in the banking business,” she said.

The Bank of Thailand has already given permission to CTBC to subscribe to the capital increased shares of LHFG, which owns the lion’s share of LH Bank.

In the next process, the company will coordinate with the Securities and Exchange Commission of Thailand (SEC) and hold a shareholders meeting to consider CTBC’s right offering waiver.

CTBC Bank has an asset value of more than US$109 billion (30.8 trillion baht) with 106 outlets in 14 countries.

LH Bank, the country’s small lender, had total assets of 212 billion baht as of March, rising 1.3% from the end of last year.

Its loans outstanding stood at 144 billion baht at the end of March, up 1.8% from the end-2016.

The bank had set total loan growth target of 6-10% this year.

The recapitalisation through private placement to CTBC would enable LH Bank’s business to expand according to the three-year plan.

The Taiwanese bank would help improve the bank’s weak business areas, particularly trade finance, treasury, wealth management and digital banking.

Apart from the three members of the board, some executives and officers from CTBC Bank would also join the Thai bank’s operations in the business areas, in which the Taiwanese bank has expertise.

Mrs Sutharntip said the bank had no plan to open more branches from 133 now, but would pay more attention to electronic and digital banking service.

It is still collaborating with its business partner Home Product Center Plc for the financial service channel expansion into the electronic platform.