LH Bank to concentrate on Taiwanese companies

Land and Houses Bank (LH Bank), a small commercial lender, has set an aggressive loan growth target of 10-15% this year, to be largely propelled by loans to both local and international large corporates.

With 100 networks in 14 countries of its major shareholder CTBT Bank, it should support LH Bank’s corporate loan growth, said Sasitorn Pongsathorn, LH Bank’s president and chief executive.

Around 3,000 Taiwan-based companies operating in Thailand are the key focus, and the bank has already managed to offer credit lines worth a combined 2 billion baht to these firms, she said.

To achieve the 2018 lending growth target, the bank needs to lend 20-30 billion baht, of which half is expected to be offered to large corporates, particularly Taiwanese firms, said Mrs Sasitorn. Based on anticipation that 50% of its new loans will be lent to corporates, the bank’s corporate loan ratio will inch up to 70% of its total portfolio this year from 69% last year.

The government’s Eastern Economic Corridor project should help attract foreign direct investment and boost the bank’s corporate loan demand, she said.

Given the bank’s focus on corporate loans in recent years, its innovative platform and pricing should help its corporate loan growth, said Mrs Sasitorn.

The bank’s total loans grew 9.9% last year. Despite the aggressive loan growth plan, LH Bank expects to control its non-performing loans (NPLs) at no more than 2% of loans outstanding this year. The bank’s NPL ratio was at 1.88% in 2017.

To strengthen its loan-loss buffer, LH Bank plans to increase its NPL coverage ratio to 120% this year from 110% in 2017.

Mrs Sasitorn said its Taiwanese shareholder will support the bank in trade finance, wealth management and digital banking business.

It is preparing a business platform for trade finance service, expected to be complete by the end of this year. LH Bank plans to roll out the new service next year after winning Bank of Thailand approval.

The bank also wants to adopt a digital wealth platform next quarter, she said. Fee-based income is expected contribute 25-30% of the total this year, compared with 28% in 2017.

LH Bank plans to maintain its 133 branches nationwide and 1,550 staff this year.