LH Bank moves toward corporate loans
Land and Houses Bank is planning to pursue loan syndications involving infrastructure projects as it foresees larger construction volumes in the next few years.
Sasithorn Pongsathorn, president of the bank, said it would expand its corporate lending portfolio strongly as it gets into infrastructure projects. This is part of LH Bank’s risk-diversification plan, as it reduces its emphasis on mortgages.
Before it upgraded on December 19 from a retail to a commercial bank, mortgages comprised 80 per cent of LH Bank’s loans. That proportion has been reduced considerably, partly as a result of last year’s flood disaster and a slowdown in the housing market, which had a big impact on mortgages in the first quarter this year.
Sasithorn said the bank had spent six years improving its systems to prepare for financing private enterprises. Lending in this sector is continuing to grow as large corporations as well as small and medium-sized enterprises invest heavily.
Meanwhile, infrastructure investment planned by the state will also accelerate demand for loans in the next few years.
LH Bank is a new player in the banking industry, she said, noting that it had been approached by many major banks to join syndicated loans. Moreover, the bank sees opportunities for lending growth in provincial markets.
The bank will strive for a 50:50 balance between business loans and its mortgage |portfolio, she said.
In the first five months of this year, LH Bank saw loan growth of 10 per cent, giving Sasithorn confidence of achieve this year’s target of 25-per-cent lending expansion thanks to the bright outlook of SMEs.
Sasithorn said the global financial problems were spreading into Asia, including China, which is an important market of Thailand. The government should quickly move forward with infrastructure investment to sustain the Kingdom’s economic growth.
