LH Bank targets doubling Taiwanese loan portfolio within five years

A subsidiary of the Land and House Financial Group (LHFG), LH Bank revealed its ambitious plan to double its Taiwanese loan portfolio over the next three to five years. This strategy is backed by the increasing influx of foreign businesses into the Thai market.

LHFG President Shih Jing Fuh highlighted that despite moderate overall loan growth in the first half of this year, the bank’s Taiwanese loan segment recorded a remarkable 31% growth rate during the same period.

The growth in Taiwanese loans is linked to direct investments from Taiwanese companies in Thailand and the trade finance services provided to foreign customers.

By June, the total outstanding Taiwanese loans stood at approximately 11 billion baht, reflecting a year-on-year increase of 23%. Additionally, the outstanding trade finance loans from the Taiwanese segment reached 3.5 billion baht, showing a 24% year-on-year growth.

In June, Taiwanese loans constituted 5% of the bank’s total loan portfolio, an increase from 4% at the end of the previous year. This proportion is expected to rise, potentially reaching 10% within the next three to five years, contingent on the expansion of other loan products, according to Shih.

Amid the ongoing US-China trade tensions, Shih noted that international investors are diversifying their production bases, with ASEAN and Thailand emerging as key destinations for foreign direct investment, particularly in the technology sector.

“For instance, investors from Hong Kong and Singapore are exploring data centre investments in Thailand, while Taiwanese investors are in discussions with the government about science park investments.”

Global networks

Shih added that LH Bank intends to leverage the global networks of its parent company, Taiwan-based CTBC Bank, to connect global technology firms, including those from Taiwan, with the local supply chain.

The bank also plans to expand its small and medium-sized enterprise (SME) loan segment gradually.

However, due to global economic uncertainties and the uneven recovery of the Thai economy, LH Bank will adopt a selective approach to providing loans during the second half of this year. The focus will remain on strategic areas such as corporate loans, Taiwanese loans, and mortgages.

For mortgages, the bank will target the upper-income segment, requiring a minimum monthly income of 50,000 baht from homebuyers, and will partner with selective developers to maintain asset quality.

As a smaller lender, LH Bank reported a non-performing loan ratio of 3% as of June. The bank aims to reduce this ratio to below 3% by the end of the year to improve asset quality.

The bank is optimistic about achieving its total loan growth target of 8-10% for this year. Shih noted that the bank recorded a 10% growth in the first half of the year on a year-on-year basis and has several loan deals in the pipeline for the second half of the year, reported Bangkok Post.