Land and Houses Financial Business Group upgraded to “A” Stable by TRIS Rating
published : 21 Mar 2023 at 17:28
Mr. Shih, Jiing-Fuh, President of LH Financial Group Public Company Limited, revealed that the credit ratings of Land and Houses Financial Business Group, consisting of LH Financial Group Public Company Limited (LHFG) and Land and Houses Bank (LH Bank), have been upgraded by TRIS Rating.
TRIS Rating has upgraded the company rating on LH Financial Group PLC (LHFG) to “A-” from “BBB+” and revised the rating outlook to “stable” from “negative”. TRIS Rating views that this adjustment is the assessment result of the position of LHFG, a strategically important subsidiary of CTBC Bank, Taiwan's No.1 private financial institution and parent company of Land and Houses Financial Business Group which is rated at “A” stable by S&P Global Ratings. LHFG plays an important role in achieving CTBC Bank's strategic goal to become the regional leading financial institution in Asia.
In addition, TRIS Rating upgraded the company rating on Land and Houses Bank (LH Bank) to “A” from “A-”, and Basel III Tier 2 capital securities to “BBB+” from “BBB”. TRIS Rating views that LH Bank, as the company in the Land and Houses Financial Group which contributes the most profit, amounting to approximately 70% of the group's net profit in 2022, and LH Bank's total asset size ccounting for more than 95% of its total assets, with assets of 2.96 billion Thai Baht at the end of 2022, increased by 17% YoY. Moreover, its NPL coverage ratio was 221% at the end of the year 2022, higher than the industry average of 172%. In addition, LH Bank further diversifies its loan portfolio to SMEs and retail segments and can draw more deposits from retail customers continuously, rising to 59% of total deposit at the end of 2022 from 54% by the end of 2020. For profitability, LH Bank had return on average asset (ROAA) at 0.40% in 2022, increased from 0.28% in 2021 with improved net interest margin (NIM) at 2.27% from 2.25% in 2021. Moreover, the liquidity profile has been assessed to be at an adequate level. The Liquidity Coverage Ratio (LCR) stood at 132% as of the end of June 2022, above the minimum requirement of 100%. Furthermore, TRIS Rating sees that LH Bank has continued to increase its investment in order to enhance its digital capabilities, which is a better development. LH Bank has recently launched the financial service application “LHB You” and investment service application “Profita”.
“This rating affirmation from TRIS Rating on Land and Houses Financial Group reflects positive perspectives on operational capabilities, digital capabilities, and competitive financial strengths and enhancement of operations in the future,” said Mr. Shih.