BANKING / FUND-RAISING

LH Bank planning IPO by 2009

DARANA CHUDASRI

Land and Houses Retail Bank Plc plans to raise registered capital to five billion baht in 2009 through an initial public offering.

The bank was on track to raise paid-up capital by 700 million baht to 2.6 billion within this quarter through a rights issue, said Sasitorn Phongsathorn, the president of LH Bank.

''After that, we will look to raise capital to five billion baht through an employee stock-option plan and private placements, with an IPO scheduled for 2009. This will allow us to then apply for a full banking licence,'' she said.

As a retail bank, LH Bank is restricted to offering foreign currency services only for banknote exchanges. The bank is also unable to offer correspondent banking services.

Mrs Sasitorn said a full banking licence and market listing would help enhance the bank's potential for business expansion, with expanded single lending limits, investment capabilities and opportunities to undertake treasury services. But she said LH Bank, owned by property giant Land and Houses, would remain focused on its niche in real estate and property.

The bank is also considering asset securitisation as an option to raise funds for business growth once its assets reach 100 billion baht within five years.

At the end of 2006, the bank had a loan portfolio of 16.8 billion baht, up by 163% from the year before. Deposits totalled 18 billion baht at the end of 2006, up 200% from the previous year.

Mrs Sasitorn said the bank planned to boost its loan portfolio to 30 billion baht by the end of this year, with equal growth on the deposit side.

The bank also aims to expand its branch network to 16 from six now, and launch new payment services to boost fee-based income.

Mrs Sasitorn said real estate and housing loans would continue to account for around 80% of the bank's loan portfolio.

''For deposits, we hope to boost the role of savings accounts to 20% of our todhtal deposits by the end of the year, compared with 15% now,'' she said.

Bangkok Post
Wednesday January 31, 2007