Land and Houses Bank (LH Bank) is aiming for double-digit growth in assets over the next three years, with a focus on corporate loans, after Taiwan-based CTBC Bank's acquisition of nearly a 36% stake in the bank's parent, LH Financial Group.
The bank's goal is to raise its total assets by at least 10% annually during 2018-20, compared with this year's target of 6-10%, said LH Bank president Sasitorn Pongsathorn.
Proceeds from the increase in capital shares have widened LH Bank's single-lending limit to 9 billion baht from 5.8 billion, which will allow the bank to expand, Mrs Sasitorn said.
The small bank's total assets now stand at 217 billion baht and they will reach 240 billion baht by year-end if 10% growth is achieved, she said.
LH Financial Group said last week that the Taiwanese bank had paid 16.6 billion baht in subscribing to the company's newly issued shares and that proceeds would be used to buy the capital increased shares of LH Bank, of which capital base will be more than doubled to 40 billion.
Mrs Sasitorn said the bank can capitalise on the larger base of the bank's single-lending limit in extending corporate loans, while the single-lending limits of other banks are restrictive.
Corporate loans still have growth potential, and a number of corporate loan deals are in the pipeline, with almost all of them to be used for working capital purposes, she said.
Corporate loans account for 65% of LH Bank's outstanding loans, while retail loans -- which were 80% of the bank's total loan portfolio since it began operations in 2005 -- were falling, Mrs Sasitorn said without providing the latest retail loan ratio.
The bank also targets 10% growth in corporate loans, while slowing down loans to small and medium-sized enterprises (SMEs) and mortgages.
Competition in the mortgage sector is intensifying and the bank would rather not jump onto the price-war bandwagon as it prefers margin to loan growth, Mrs Sasitorn said.
The bank's mortgage growth is expected to be flat this year.
Upon completion of CTBC Bank's investment in LH Financial Group, wealth management and trade finance services will be LH Bank's areas of focus, Mrs Sasitorn said.