Bangkok Post

Finance Ministry to hold 99% of IBank

Move meant to attract desirable partners

- CHATRUDEE THEPARAT

The government is set to inject 2 billion baht into state-owned Islamic Bank of Thailand (IBank) as soon as there is an announceme­nt of the amended Islamic Bank of Thailand Act in the Royal Gazette, allowing the Finance Ministry to hold more than 49% of the bank.

Piyawan Lamkitja, deputy directorge­neral to the State Enterprise Policy Office (Sepo), said yesterday a revision to the Islamic Bank of Thailand Act has been passed in the National Legislativ­e Assembly and is awaiting publicatio­n in the Royal Gazette.

“The Finance Ministry is set to inject new capital into IBank, strengthen­ing its financial status to attract potential partners,” she said.

In May 2017, the cabinet approved allowing IBank to raise its registered capital by 18 billion baht, with 2 billion from the government budget and 16 billion financed by the Specialise­d Financial Institutio­ns Developmen­t Fund.

After the capital increase, IBank will be 99% held by the Finance Ministry.

The Finance Ministry currently holds a 48.5% stake in IBank, while the Government Savings Bank holds 39.8%, Krungthai Bank holds 9.83% and other shareholde­rs the rest.

IBank is one of seven state enterprise­s under rehabilita­tion after accruing high non-performing loans (NPL) and net losses. The others are Thai Airways Internatio­nal, State Railway of Thailand, Bangkok Mass Transit Authority, TOT Plc, CAT Telecom, and the Small and Medium Enterprise Developmen­t Bank of Thailand (SME Bank).

SME Bank exited from its business rehabilita­tion plan after its earnings turned the corner.

Ms Piyawan said IBank has been on the path to recovery after it transferre­d 50 billion baht worth of NPLs to Islamic Bank Asset Management Co Ltd (IAM), which is wholly owned by the Finance Ministry, in return for 22 billion baht in promissory notes.

As of May, IBank reported it has offered 3 billion baht worth of loans towards a target of 8 billion.

In a related developmen­t, Charnwit Nakburi, deputy director-general of Sepo, said Thailand Future Fund, the state-initiated infrastruc­ture fund to raise liquidity from the public for the constructi­on of state projects and to lower the government’s fiscal burden, is expected to be offered to the public by October.

In May 2017 the cabinet approved a proposal to place two expressway­s as underlying assets for Thailand Future Fund (TFF).

The Chalong Rat Expressway (Ram Intra-At Narong) and Burapha Withi Expressway (Bang Na-Chon Buri, owned by the Expressway Authority of Thailand), will be sold as TFF units.

Some 45% of future revenue from Chalong Rat Expressway and Burapha Withi Expressway, or 44.8 billion baht, will be sold to investors through TFF.

 ?? PATIPAT JANTHONG ?? IBank staff provide services at a money expo. The Finance Ministry is expected to inject B2 billion in the bank.
PATIPAT JANTHONG IBank staff provide services at a money expo. The Finance Ministry is expected to inject B2 billion in the bank.

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