LH Bank to broaden loan base

Land and Houses Bank (LH Bank) is looking at diversifying its customer base by increasing financial services to business outside its major shareholder Land and Houses (LH) Group. The aim is to balance risks to maintain sustainable growth.

However, LH and its group will remain the bank’s key business partners, said bank president Sasitorn Pongsathorn.

The bank’s pre-financing loans to LH and its affiliates dominate 70% of the bank’s project financing, but it aims to raise the ratio lent to companies outside LH’s group to 40-50% in the next few years.

LH owns a 34.12% stake in Land and Houses Financial Group (LH FG), a holding company of LH Bank. Other shareholders are Quality Houses, in which LH holds a 29.88% stake, while QH holds a 21.43% stake in LH.

Like its industry peers, the small bank has targeted provincial areas due to high growth potential and risk diversification, in particular cross-border areas.

LH Bank has assets of 165 billion baht and aims for 20-25% loan growth this year from loans outstanding of 115 billion last year. It also targets 10-15% asset growth in 2015.

Corporate and small and mediumsized enterprise (SME) business will be the bank’s key focus this year to diversify its lending portfolio.

Separately, the bank plans to issue Basel III-compliant tier-2 bonds worth 3-5 billion baht in the middle of the year to finance its business expansion over the next few years and raise its capital adequacy ratio to 13% from 12.4% now.

Mrs Sasitorn said the bank was still in talks with two to three tentative partners, but she was unaware of the bank’s 51% share sale to CP All that local media reported on Monday.

LH BANK shares closed on the SET yesterday at 2.04 baht, unchanged, in trade worth 132 million baht, while LH shares closed at 9.60 baht, unchanged, in trade worth 214 million baht.