By Suttinee Yuvejwattana – Aug 30, 2011 3:01 AM ET
Kasikornbank, the nation’s fourth- largest bank by assets, plans to arrange financing for two hydropower projects in Laos, Executive Vice President Vasin Vanichvoranun said.
Kasikornbank will provide about four billion baht ($133 million) to both the Nam Ngum 3 and Nam Ngiep 1, power plants in Laos with a combined value of more than 60 billion baht, he told reporters in Bangkok today.
Kasikornbank and its unit Kasikorn Securities also have 15 fundraising deals this year with a combined value of 360 billion baht, he said. Of those, four deals worth 5 billion baht are initial public offerings, he said.
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Kasikornbank forecasts corporate loans will exceed its 2011 target, driven by big deals expected for the remainder of the year, said executive vice-president Vasin Vanichvoranun.
The bank’s wholesale loan growth throughout this year would be around 10%, double the existing projection at 4-6%. However, KBank has no plan to adjust the target.
Syndicated loans worth 51 billion baht in total for three infrastructure projects would be a boon for commercial banks in the remaining five months of the year. Of the total lending, KBank would extend 12 billion baht, or 4 billion baht for each of the three projects.
“Doubling our corporate loan growth from the existing target is mainly due to project finance. Infrastructure project investment is better than projected partly because of the slowdown [in such investment] over the last few years. The healthy economy also encourages loan demand as well,” Mr Vasin said.
He added that large banks would benefit more from financing big projects rather than smaller banks.
The three infrastructure projects include the 440-megawatt Nam Ngum 3 hydropower plant in Laos, with total syndicated loans of 22 billion baht, and the 300-MW Nam Ngiep 1, with combined loans worth 25 billion.
KBank will be the sole lender in the other project, which involves a satellite and is worth 4 billion baht.
These deals would bring both interest and fee-based income on target for this year, he said.
Moreover several financial deals of the bank’s subsidiary, Kasikorn Securities, will enhance the bank’s fee income as well. They mainly involve initial public offerings, private placements, mergers and acquisitions and buyouts worth around 360 billion baht in total.
KBank projects total corporate banking revenue of 15.6 billion baht, of which 7.1 billion would be fee-based income, growth of 22% year-on-year.
Mr Vasin added the energy sector would generate the highest growth rate for the bank’s corporate loans, at 44%, followed by the petrochemical industry (29%), and the hospitality sector (28%). Meanwhile, the growth rates of the automotive and food sectors would be 19%.
KBANK shares closed yesterday on the SET at 122.5 baht, down three baht, in trade worth 1.2 billion baht.
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- Writer: Somruedi Banchongduang
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