TMB to focus on lending for energy sector projects
TMB Bank aims to become the country's biggest lender for energy projects within the next few years, the bank's chief operations officer said recently.
Kraithip Krairiksh said that as energy-sector development, particularly in alternative ener- gy sources, was on the government's national agenda, there was high potential for this business to grow. He declined to confirm or deny it was his bank's good connections with government agencies that would be a major contributor to the bank's success in this business. The Finance Ministry owns 30 per cent of TMB. "This business has been inherited from the IFCT [Industrial Financial Corporation of Thailand, a financial institution that was merged with TMB]. TMB is an expert in the area of lending for energy projects and is ranked number one in this area with the largest market share for lending to this sector," said Kraithip. However, the bank's loans to this sector are at present less than 10 per cent of its total loan portfolio. Anat Prapasawad, the executive officer of the bank's business department, said the bank's lending to energy projects covers three areas: project financing, which the bank calls energy finance, project consulting ("energy plus") and project venture capital ("energy partner"). He said the revenue structure for energy finance, energy plus and energy partner was 60 per cent, 30 per cent and 10 per cent, respectively. Revenue from energy finance is mainly derived from interest income, while the energy-plus business generates revenue from both interest and fee income. Energy partner generates revenue from dividends, as well as interest income. Anat said the bank was targeting Bt3 billion in new loans for the energy-plus and energy-partner areas this year, up from Bt1.7 billion last year. The bank has in the first five months lent half its target for the entire year. As a result its lending for energy is likely to surpass its target by the end of the year, he said. "The bank is currently dealing with a customer whose factory uses ethanol energy, to finance a loan with a total credit line of Bt4 billion-Bt5 billion. The contract is expected to be signed by the end of the year," he said, adding that the bank would focus on providing loans to large corporations that had earmarked at least Bt5 million for energy investment.
Somruedi Banchongduang The Nation
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