SUNDAY, April 21, 2024

SMEs in focus as part of new growth strategy of Land and Houses

SMEs in focus as part of new growth strategy of Land and Houses

Land and Houses Financial Business Group (LHFG) aims to focus on expanding loans to potential small and medium-sized enterprises (SMEs) and retailers in pursuit of higher growth, group president Shih Jiing-Fuh told a media briefing on Thursday.

The move was part of its 2024 strategy, following the company's impressive net profit of 2.096 billion baht in 2023, a 32.8% increase year on year.

Citing the country's positive economic factors for further growth this year, such as rapid tourism recovery, government's supportive measures to attract foreign direct investment, and domestic consumption sentiment, he said that the overall scenario provided a favourable environment for commercial banks to grow.

To keep up with the trends, he said LHFG would accelerate its growth by rapidly expanding its customer base in both retail and SMEs through digital channels, business partners, and redesigned operating channels and processes with a sector-focused approach.

"Those SME customers would primarily be in target industries such as electronics, EV cars, automobile parts, renewable energy, and printed circuit boards [PCB],” he said, adding that the group had already provided loans to some SMEs in the those industries, particularly PCB.

"I can say that Taiwan's top three PCB manufacturers have already planned to establish a factory in Thailand as part of their derisking strategy to deal with geopolitical tensions between the United States and China. Their move required a credible source of funding, which LHFG is ready to provide," he explained.

Although Thailand's current high interest rates hinder retail expansion plans and foreign direct investment, the possibility of a rate cut in the second half of this year will encourage more companies to apply for more loans, he said.

Shih Jiing-Fuh

Shih insisted that LHFG would lend cautiously and responsibly, so that the strategy would not result in an increase in non-performing loans (NPL).

The group, he said, would launch a leadership and package solution programme tailored to each sector, as well as a lean process for faster approval and effective customer response, in addition to product improvement, staff knowledge enhancement, financial advisory, and business services for SMEs to support their long-term growth.

Regarding its home loans in Land and Houses Bank, he noted that the group intends to expand home loans and refinance loans with a 20% growth target, as well as improve wealth products, deposit products, investment products, and insurance products tailored to each segment of customers.

While LHFG had a net profit of 2.096 billion baht last year, LH Bank reported a net profit of 1.693 billion baht, up 54.9% year on year. The bank's growth was driven primarily by an increase in net interest income as a result of continued bank loan growth, particularly in retail home loans, and net income margin improvement.

Meanwhile, LH Bank maintained a healthy NPL control rate of 2.65%, with NPL coverage at a comfortable level of over 200%.

As per its strategy, the bank expects to grant 1 billion baht in loans this year and to grow at a rate of 10-15% per year over the next five years.

Land and Houses Fund Management (LH Fund) has set a strategy focused on improving fund performance in Thai and international equity funds that are appropriate for the risk appetite, with the goal of diversifying the customer base, company president Monrat Phadungsit said.

(from left) Monrat Phadungsit, Shih Jiing-Fuh and Kant Athatamsunthorn

The company is committed to managing mutual funds in the top quartiles, providing fund information that is relevant and in line with rapidly changing market conditions, and developing integrated services for its private fund clients, he said.

The company plans to grow its customer base and educate members of provident funds, real estate funds, and real estate investment trusts (REITs).

"The company targets to grow funds and investments in new assets as well as create innovations that are environmentally friendly and expandthe REIT Trustee," he said.

The total fund size under management in 2023, including real estate mutual funds and real estate investment trusts, was around 61.112 billion baht, up 10% over 2022.

He explained that the growth was due to capital increases in REITs and was expected to continue. The private fund had a size of 14.245 billion baht and grew by 0.1%. Provident fund had a fund size of 7.047 billion baht, with a 16.6% increase.

Land and Houses Securities president (LH Securities) president Kant Athatamsunthorn said this year's strategy would focus on increasing efficiency in both technology systems and investment advisory services, with the goal of expanding through digital platforms.

Meanwhile, he noted that the company's goal is to gain more new customers while also increasing existing customer engagement and new business penetration in order to better meet customer needs and provide comprehensive services.

In 2023, the company improved its service efficiency by developing technological capabilities that would give retail investors complete access to the company's products and services via digital channels. Last year, the company earned 541.35 million baht, a 12.6% decrease year on year, reflecting the decrease in trading volume on the Stock Exchange of Thailand.