Plans to boost capital in the Islamic Bank of Thailand will hinge on the bank's success in rehabilitating its finances and addressing its ongoing bad loans, says Somchai Sujjapongse, the director-general of the Fiscal Policy Office.
"Before the ministry approves a capital increase ... we need to see success in the restructuring plan," Mr Somchai said following a meeting with bank executives yesterday.
The Islamic Bank of Thailand, or IBank, currently has capital funds at 4.6% of risk assets, well below the 8.5% minimum set by the Bank of Thailand for commercial banks, and the 12% to 15% levels currently maintained by the country's largest banks. The global Basel III standard does not apply to state-owned financial institutions such as the IBank, which is under the supervision of the Finance Ministry.
This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.