The country's largest state-owned bank aims to boost lending by the two foreign branches, said bank president Apisak Tantivorawong.

Within the first half of this year, the bank plans to raise US$350 million-$450 million (Bt13.7 billion-Bt17.6 billion), of which $150 million has been raised and the remainder will be generated through hybrid-bond sales.

Krung Thai has appointed Standard Chartered Bank as the manager of the bond issue, while the planned offering of hybrid debt instruments will be lead managed by Merrill Lynch.

"This year, we targeted foreign loan growth of 6 to 7 per cent. However, the bank has no plan to raise more foreign funds than this," he said.

KTB has seven overseas branches.

Apisak said proceeds from the $150-million bond issue were used to refinance the bank's debt incurred from its US and Singapore branches.

The bond carries a coupon rate of 10 basis points on top of the London Interbank Offering Rate.

Recently, KTB considered issuing both foreign debentures and floating rate notes. The bank decided to offer foreign bonds because of the lower funding costs.

Apisak said the coupon rate of its planned hybrid bond would be quoted above 6 per cent, a satisfactory rate for the bank. KTB will hold a regional road show for the hybrid bonds in April or

May.

Part of the $200 million-$300 million hybrid bond will be used for to fund its foreign expansion.

After hybrid bond is issued, the bank's Tier-1 capital will increase by 1 percentage point from its current 8.4 per cent.

In addition, he said the bank was in talks with three or four securities firms to buy their shares as part of its plan to hold a 40 per cent stake of Trinity Watthana Plc, a securities house it currently owns 16 per cent of.

Recently, a Trinity Watthana's executive disclosed that KTB is negotiating with the company to increase its stake and that the company welcomes the bank.

Somruedi Banchongduang

The Nation