Rehabilitation plan for IBank approved
The cabinet yesterday approved the rehabilitation plan for the embattled stateowned Islamic Bank of Thailand (IBank).
The cabinet also said the Finance Ministry can take a controlling stake in the bank if it fails to find new partners, said Nathporn Chatusripitak, an adviser to the Prime Minister’s Office Minister Suvit Maesincee.
IBank is among seven state enterprises under rehabilitation. The others are Thai Airways International, the State Railway of Thailand, the Bangkok Mass Transit Authority, TOT Plc, CAT Telecom and the Small and Medium Enterprise Development Bank of Thailand.
The State Enterprises Policy Commission (superboard) told IBank last month to step up efforts to find new partners and raise its registered capital by June, saying the bank’s rehabilitation plan had been delayed for too long.
The loss-making IBank has long sought new partners, though its plans hit a snag as interested investors requested that the state-owned bank finish recapitalising beforehand to raise its capital adequacy ratio (CAR) to align with the Bank of Thailand’s minimum requirement of 8.5%.
To reach that requirement, IBank needs to raise its capital by 20 billion baht. But the superboard has only approved injecting 18 billion baht into the bank. That injection has yet to be completed.
IBank’s CAR now has a negative value of 20%.
Under the bank’s rehabilitation plan, the superboard will permit IBank’s new partner to hold up to a 74.5% stake in the bank.
If the partner wants to own more than that limit, it can seek government approval and may initially be allowed to hold in excess of the 74.5% limit and gradually reduce the shareholding to the threshold at a later point.
The Finance Ministry holds a 48.5% stake in IBank, the Government Savings Bank has 39.8%, Krungthai Bank has 9.83% and other shareholders own the rest.
IBank was also required to transfer 50 billion baht worth of non-performing loans owed by non-Muslim debtors to a new asset management company, Islamic Asset Management.
The bank suffered net losses of 3.4 billion baht last year.
IBank expects to recover this year and turn a 5-million-baht profit.
Mr Nathporn said Prime Minister Gen Prayut Chan-o-cha has also required the bank to take legal action against people who have failed to repay their loans.