TMB Bank has issued green bonds, the country's first bond to finance environment-related projects, worth US$60 million (1.85 billion baht).
The bank has largely offered the seven-year green bonds to the International Finance Corporation (IFC), with proceeds arising from the bond issuance to be used to finance climate-related projects and contribute to sustainable development, said chief executive Piti Tantakasem.
Funds from the bond offering are to be lent to renewable energy and energy-efficiency projects benefiting both the economy and the environment, he said.
TMB also aims to expand its green lending portfolio under guidance and support from the IFC to 15 billion baht in the next five years, up from 9 billion.
Vivek Pathak, IFC's director for East Asia and the Pacific, said TMB is the first financial institution in Thailand and the second bank in Asia-Pacific to issue green bonds. IFC also supported the Philippine Bank, which was the first in the region to float green bonds six months ago.
IFC, a member of World Bank Group, has collaborated with Amundi, Europe's largest asset manager, to set up a green bond fund with investments focused on emerging markets.
TMB, the country's seventh-largest lender by assets, plans to offer another batch of bonds worth $90 million to IFC, to support the small and medium-sized enterprise (SME) lending programme. TMB and IFC have a long-standing relationship supporting local enterprises under the SME loan programme.
In related news, Mr Piti said the bank's total loan growth for the first five months of the year fell short of target due to slower-than-expected SME loan growth.
A new SME loan analysis model, based on data analytics, is a key factor slowing down the bank's loan expansion, he said, and more time is needed to master the new model.
"If we want to achieve our total loan growth target of 8-10% this year, we can do it by growing corporate loans which offer minimal yields," Mr Piti said. "But the bank will meet the lower-end of the target by focusing on SMEs under a data-driven-lending model to sustain the business segment in the long term."
TMB typically strives to divest itself of bad loans on a quarterly basis to limit the non-performing loan ratio to 2.6% by year-end.
TMB shares closed yesterday on the Stock Exchange of Thailand at 2.48 baht, unchanged, in trade worth 354 million baht.