Islamic Bank of Thailand to lift capital base by B2-3bn

DARANA CHUDASRI

The Islamic Bank of Thailand plans to raise capital by between two billion and three billion baht to help support loan growth this year. The bank, which had outstanding loans of seven billion baht at the end of 2006, expects its portfolio to rise to 22 billion by the end of this year. The bank posted growth of 700% last year.

Dheerasak Suwannayos, the bank chairman and acting president, said the four-year-old bank expected to break even and turn a profit this year.

''We plan to increase our capital by two billion to three billion baht from one billion now and aim for aggressive growth throughout the year,'' he said.

The bank also plans to raise three billion baht in new funds through the issue of certificates of deposit, he said.

The Islamic Bank of Thailand, which operates strictly under Islamic law, has a retained loss of about 400 million baht to date.

Mr Dheerasak said he expected the bank to turn a profit this year thanks to its growing product portfolio servicing retail clients, exporters and importers and corporate customers.

The bank recently signed trade finance deals with three firms _ Andaman Seafood, Siam International Food and Thailand Fishery Cold Storage to provide each with 200 million baht in facilities.

Poj Aramwattananont, president of Andaman Seafood, said the funding cost for the facility was fixed at 8% per year.

While slightly higher than that charged by other financial institutions, the Islamic Bank offered a good channel for the company to expand its market to the Middle East, Mr Poj said.

''The Middle East represents 20% of Thailand's canned tuna exports. Connecting through the Islamic Bank is a good option, given that it operates with the same procedures as those used in the Middle East,'' he said.

The Islamic Bank, whose shareholders include the Finance Ministry, Krung Thai Bank and the Brunei Islamic Bank, plans to launch new personal finance products next month, with a target of six billion baht in facilities offered this year.

Deposits are targeted to reach 20 billion baht by the end of the year.

General News
Bangkok Post
Thursday January 25, 2007