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FINANCE
LH Bank, the banking arm of the country's biggest residential developer, Land & Houses Plc, said yesterday that it planned an initial public offering in the second half of 2009 and wanted to become a full-service bank.
The lender, founded in 2005, would raise at least 2.6 billion baht through the IPO and a stake sale to a foreign bank in a bid to enhance its competitiveness, said president Sasitorn Phongsathorn.
''To increase our capital enough to upgrade to become a universal bank, we need an IPO and we have to find a suitable foreign partner,'' said Mrs Sasitorn.
''We expect to offer a 15-20% stake in the IPO and a 20-25% stake to the partner.
''But the IPO is the priority. The partner could come after the IPO, or at the pre-IPO stage, depending on the price offered.''
The bank has hired SCB Securities as the financial adviser for the IPO.
''What we need is a foreign bank that has no presence here, so that we will grow together. What we have is a strong data base, so we are looking for someone who knows how to utilise the data,'' Mrs Sasitorn said, referring to the parent company's large customer base.
To become a full-service commercial bank under Bank of Thailand rules, a bank must have a capital base of at least five billion baht, compared with LH's 2.37 billion, she said.
LH bank currently offers banking services to individuals and small and medium-sized firms. It cannot undertake riskier activities, such as operating foreign exchange and derivatives businesses.With 38.4 billion baht in assets and 29 billion baht in loans, the bank is 43% owned by LH and 27% by the developer's affiliate, Quality Houses.
The bank had a book value of 9.50 baht per share and expected that to increase as it planned to wipe out a retained loss of about 200 million baht by the end of the year, Mrs Sasitorn said.
Housing loans account for 78% of LH Bank's total lending. Most of those loans go to customers of LH housing projects. The remaining 22% is lent to small firms.
The bank, which operates 17 branches and has 581 staff, aims for loan growth of 40% to a net 35 billion baht at the end of this year, when its assets should rise to 45 billion baht. It has a broad plan to expand its total assets to 100 billion baht in 2011. REUTERS
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