Aug. 20--LH Bank, the banking arm of the country's biggest residential developer, Land & Houses Plc, said yesterday that it planned an initial public offering in the second half of 2009 and wanted to become a full-service bank.

The lender, founded in 2005, would raise at least 2.6 billion baht through the IPO and a stake sale to a foreign bank in a bid to enhance its competitiveness, said president Sasitorn Phongsathorn.

"To increase our capital enough to upgrade to become a universal bank, we need an IPO and we have to find a suitable foreign partner," said Mrs Sasitorn.

"We expect to offer a 15-20 percent stake in the IPO and a 20-25 percent stake to the partner.

"But the IPO is the priority. The partner could come after the IPO, or at the pre-IPO stage, depending on the price offered."

The bank has hired SCB Securities as the financial adviser for the IPO.

"What we need is a foreign bank that has no presence here, so that we will grow together. What we have is a strong data base, so we are looking for someone who knows how to utilise the data," Mrs Sasitorn said, referring to the parent company's large customer base.

To become a full-service commercial bank under Bank of Thailand rules, a bank must have a capital base of at least five billion baht, compared with LH's 2.37 billion, she said.

LH bank currently offers banking services to individuals and small and medium-sized firms. It cannot undertake riskier activities, such as operating foreign exchange and derivatives businesses.With 38.4 billion baht in assets and 29 billion baht in loans, the bank is 43 percent owned by LH and 27 percent by the developer's affiliate, Quality Houses.

The bank had a book value of 9.50 baht per share and expected that to increase as it planned to wipe out a retained loss of about 200 million baht by the end of the year, Mrs Sasitorn said.

Housing loans account for 78 percent of LH Bank's total lending. Most of those loans go to customers of LH housing projects. The remaining 22 percent is lent to small firms.

The bank, which operates 17 branches and has 581 staff, aims for loan growth of 40 percent to a net 35 billion baht at the end of this year, when its assets should rise to 45 billion baht. It has a broad plan to expand its total assets to 100 billion baht in 2011.

-----

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.

Copyright (c) 2008, Bangkok Post, Thailand

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.