The state-owned Islamic Bank of Thailand plans to increase its capital by Bt5.138 billion to Bt11.09 billion in the second half of this year to support its business expansion after successfully restructuring Bt22 billion in non-performing financing (NPF)
The bank turned around to show net profit of Bt2.7 billion last year after recording a net loss of Bt13.25 billion in 2012. This was due to the bank’s rehabilitation plan after facing a huge NPF burden worth Bt42.7 billion in the middle of last year, IBank chairman Dr Premkamon Tinnakorn Na Ayuttaya said.
Of the Bt5.138 billion in new capital, about Bt2.5 billion will come from the Finance Ministry, Bt2.043 billion from Government Savings Bank, Bt502 million from Krungthai Bank, and the remaining Bt93 million from retail investors.
After the increase in capital, the Finance Ministry will hold a 48.59-per-cent stake in the bank, with 39.79 per cent held by GSB, 9.80 per cent by KBank, and 1.81 per cent by retail investors.
IBank’s acting managing director, Dr Kanchit Singsuwan, said the increase in capital would make the bank’s equity and liquidity strong enough to expand its business this year.
The bank’s business strategy is to continue restructuring its NPF, which now totals Bt27 billion. It is negotiating with Sukhumvit Asset Management Co to deal with Bt8 billion of the total, while the remaining Bt19 billion will be restructured by IBank.
Meanwhile, the bank will continue to expand its lending to businesses and retail customers by Bt20 billion this year. This should boost outstanding loans from Bt107.69 billion at the end of 2013 to around Bt127 billion by end-2014.
The bank also aims to boost its deposits by at least Bt25 billion from Bt111.5 billion at the end of last year to Bt136.5 billion in 2014.
Meanwhile, the bank plans to increase its fee income by introducing new business services such as bill payment, hire purchase, and bancassurance.
“We target net profit of at least Bt2.7 billion this year, Bt700 million from our business operations and the rest from restructuring our NPF,” Kanchit said.