Islamic Bank of Thailand has asked the central bank to provide it with an additional Bt800 million in soft loans for re-lending to flood victims, president Thirasak Suwanayos said yesterday.
The bank also plans to lend more to support those wanting to do business in Asean.
Flood victims have already applied for loans worth Bt800 million, which is the amount previously made available to the bank under the flood-recovery scheme, he said.
His institution therefore intends asking for another Bt800 million from the Bank of Thailand because of high demand. Borrowers pay a fee of only 3 per cent annually to Islamic Bank for flood-related loans, he said.
The bank also plans to provide more loans to Thai enterprises wanting to do business in the region under the Asean Economic Community, which comes into effect in 2015.
As Asean has about 260 million Muslim inhabitants, mainly in Indonesia and Malaysia, there is a vast opportunity to do business, particularly for halal food enterprises, Thirasak said.
Global Thai food exports total about Bt70 billion annually, with halal food accounting for about Bt10 billion of this amount.
He said the bank would provide trade finance and other credit to those wanting to pursue additional halal business. The assistance will be fully in line with Islamic sharia law.
Meanwhile, the bank has won approval from the Finance Ministry for fresh capital of Bt1.5 billion this year, he said, adding that would also issue an Islamic bond in the third quarter to raise a further Bt5 billion.
The institution also plans to become a retail bank in the next five years, which will reduce the proportion of large corporate clients, which currently account for 60 per cent of its outstanding lending of Bt120 billion.
Large corporate loans will be reduced to 15 per cent of the portfolio over the period, while retail lending should increase to 45 per cent and loans for small and medium-sized enterprises should rise to 35 per cent. Microfinance should represent about 5 per cent, he said.
To achieve the retail-banking goal, Thirasak said the bank would employ the direct-sales method to keep costs to the minimum and reach large customers.
Islamic Bank, which this year plans to lend a total of Bt20 billion, will launch a new deposit product offering a return of 3.7 per cent for a nine-month term. The minimum deposit will be Bt9,000, with a maximum of Bt20 million for each account, the president said.