LH Bank aims for buyers of other developers' homes
Land and Houses Retail Bank aims to achieve Bt500 million in mortgage loans by the end of the quarter to home-buyers not introduced by the Land and Houses (LH) Group, bank president Sasitorn Phongsathorn said yesterday.
Prior to July, the bank's mortgage loan portfolio had been generated entirely from clients introduced by LH affiliates. "Lending to customers outside the LH Group is considerable, though the bank started to focus on this target group only two months ago. In future, we want to grant mortgage loans to customers from the LH Group and other developers in a 50-50 ratio," Sasitorn said. Companies affiliated with or linked to the group are LH itself, Quality Houses Plc (QH), and Asian Property Plc. The group accounts for 40 per cent of Thailand's residential property market. She added that diversity of the bank's home loans to customers outside the LH Group was mainly due to the confidence of the bank's other partners in the real-estate business. "The bank gives them a satisfactory beneficial condition, though it isn't as much as what the bank has given to partners in the LH Group." Sasitorn, however, denied that a reduction in LH Group home sales was the reason the bank had to shift the thrust of its loan expansion to the other target group. LH recorded a net profit of Bt725.94 million for the second quarter, 49.19 per cent less than the Bt1.42 billion made in the same period last year. This was caused by a Bt1.73-billion fall in the company's home sales revenue. QH posted a net profit of Bt73.82 million in the second quarter, down from Bt255.25 million in the same three months last year - a 71.29-per-cent drop. QH home sales revenue fell Bt388.5 million year on year, or 21.6 per cent. AP's net profit in the second quarter was Bt234 million, a 40.11-per-cent increase from the Bt167 million posted a year earlier due to a 59-per-cent revenue increase of Bt1.73 billion. Although home-buyers of LH's affiliates are its main target group, LH Bank has to compete with other commercial banks in this customer segment. Operated solely as a retail bank, it is difficult for it to expand as it has huge capital to support. LH Bank will not, however, speed up its plan to upgrade to a full-array commercial bank. It hopes to be listed on the Stock Exchange of Thailand in the next three years. The bank is confident it can achieve targeted housing loan growth of Bt11 billion this year. Its current mortgage portfolio is Bt7.5 billion.
Somruedi Banchongduang The Nation
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