LH Bank optimistic about stronger economy in second half of year

Land and Houses Bank Public Company Limited (LH Bank) on Thursday expressed optimism that the Thai economy would improve in the second half of the year but maintained its GDP expansion prediction at 2.4%, with the main contribution coming from the tourism industry.

The bank’s GDP estimate is in line with that of the World Bank, which last month lowered its growth forecast of the Thai economy to 2.4% from the 2.8% it had predicted in April.

Meanwhile, the International Monetary Fund (IMF) last week revised upwards Thailand’s GDP growth forecast to 2.9% for this year, up by 0.2 percentage point over the previous forecast, but maintained 3.1% for next year.

LH Bank CEO and president Shih Jiing-Fuh said the economy in the second half of the year will have a better outlook thanks to the booming tourism industry, as well as increased government spending that will stimulate both domestic and foreign investments.

“However, the recovery of the Thai economy still faces some uncertainties from foreign politics, notably the general election in the United States that could worsen international trade wars,” he said. “Domestically, Thailand is still battling rising household debts, which will continue to slow domestic consumption.”

LH Bank has set a growth target for its lending business this year of 8% to 10% over last year, and feels positive that this target can be met by prioritising three high potential groups: Housing loans, SME operators, and Taiwanese customers.

“In Housing loans, we focus on borrowers who earn over 50,000 baht per month, as they have high potential and demand, and a relatively low ratio of non-performing loans (NPLs),” said Shih.

On the SME front, LH Bank prioritises operators in high-yield industries, including technology investment, data centres and logistics.

“SME loans carry higher risk than other groups of customers, but these operators are crucial contributors to Thailand's GDP expansion and must therefore be continually supported,” said the CEO.

The bank said it would continue to focus on foreign customers, especially Taiwanese, who helped its lending business in the first half of 2024 to expand 24% year on year.

“We also aim to attract new customers on digital platforms and support them on the path toward sustainability,” Shih said.

The bank estimated the NPL ratio this year at 3%, which is around the same level as last year, thanks to the implementation of responsible lending practices introduced by the Bank of Thailand.