Land and Houses Financial Business Group (LHFG), a holding company of LH Bank, aims to grow its Taiwanese banking business more aggressively this year, boosted by manufacturing relocation by multinational and Taiwanese firms to Asean amid deglobalisation.
The bank's Taiwanese loan portfolio tallied 8.9 billion baht in 2022, strong growth of 95% from the previous year.
LH Bank targets expanding its outstanding loans to 15 billion baht, a 55% growth rate, this year.
Higher demand from foreign investors investing in Asean countries including Thailand would facilitate the expansion, said Shih Jiing-Fuh, president of LHFG.
According to Mr Shih, deglobalisation is a key factor making foreign investors across the world relocate their manufacturing bases from China, where labour costs are rising, to Asean.
Foreign production bases initially move to Asean, then diversify to other regional countries including Thailand, he said.
Deglobalisation can be defined as the movement towards a less connected world, characterised by powerful nation-states, local solutions and border controls, rather than global institutions, treaties and free movement.
In addition, Mr Shih said the bank plans to drive its trade finance business this year as the segment should contribute fee-based income.
In 2022, revenue from trade finance represented 5% of the bank's total fee income, with the figures expected to increase in 2023. LH Bank did not provide a specific target.
"Although we have some concerns about the Thai export slowdown in line with global economic circumstances, the world economy is expected to pick up in the second half, supporting shipments," he said.
"Moreover, Thai exports still have high potential to grow in the longer term."
Chompoonoot Pathomporn, chief executive and president of LH Bank, said it would also focus on high-yield businesses in 2023 to improve revenue, covering all segments including conglomerates, companies, small and medium-sized enterprises (SMEs) and retail customers.
SME loans represent the largest portion at 30% of the bank's loan portfolio, followed by corporate loans at 25%, conglomerate loans 22%, retail loans 19% and Taiwanese loans 4%.
LH Bank aims to balance its loan portfolio by 2027, with 35% from SME and corporate loans each, and the remaining 30% from retail loans.
The bank wants to continue to develop digital infrastructure systems and data analytics to support business expansion of both individual and commercial banking businesses.
Two digital platforms support retail customers for banking and investment services, LHB You and LH Bank Profita, respectively.
LH Bank has been developing LHB You to offer digital loans on the mobile banking app and expects to launch the service in the third quarter this year, said Ms Chompoonoot.
Around 60% of the total retail customer base uses digital banking services and the bank targets digital adoption to increase to 90% by 2027, she said.