Feb. 2--Land and Houses Retail Bank is seeking a foreign partner to give the bank access to international networks, said executive chairman Rutt Phanijphand.

Capital was not a constraint for the bank, he added.

LH Bank has a capital adequacy ratio of 13.84 percent, based on the new Basel II capital standard, while the Bank of Thailand requires banks to maintain a minimum base of 8.5 percent, he said.

"But a foreign strategic partner would help support the bank's weak areas -- in particular, our international business," he said.

LH Bank is one of the country's smallest banks, with total assets of 44.21 billion baht. The bank, a unit of leading developer Land and Houses, has a loan book primarily made up of mortgage loans to customers of the LH group.

Mr Rutt said the bank was in talks with several international groups about taking a share stake. But he acknowledged that, with the global financial crisis, many Western banking groups have shied away from new investment.

Asian financial institutions might be a better fit for LH Bank, considering that many of the region's banks have fared better in recent months than their European or US counterparts, he said.

Mr Rutt said cultural factors might also make an Asian bank a better fit as a partner for LH Bank.

"It's still too volatile to talk about [an investment] with US banks right now. And while some European institutions, such as the French banks, remain strong, they have quite a low-profile in their Thai business. So I think it's the Asian banks that are most interesting," he said.

In any case, LH Bank remains focused on organic growth for 2009. The bank still hopes to list on the Stock Exchange of Thailand by the end of the year, and to upgrade from its retail banking licence to a full-service licence within the next few years.

LH Bank, which was founded in late 2005, will be able to apply for a full-service licence in 2010. Other retail banks include AIG Retail Bank and Thai Credit Retail Bank.

LH Bank posted a 2008 net profit of 240 million baht, more than double the 101 million in profits posted the year before.

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