The Islamic Bank of Thailand (IBank) aims to reduce its non-performing loans (NPLs) to 8 billion baht this year, from the current level of 13 billion baht, by helping its major corporate customers restructure their debt, says the bank's president Thaweelap Rittapirom.
He said the bank had total outstanding loans of 62 billion baht last year, of which 20%, or 13 billion baht, were NPLs.
The bank would ask 3-4 major corporate customers to enter its debt restructuring programme. Mr Thaweelap believes they would be able to return to conduct business as usual after entering the programme. These customers had financial troubles even before Covid-19, and the pandemic caused their situations to deteriorate further.
The bank's NPLs earlier stood at 40-50% of outstanding loans. The bank is one of the state enterprises under the Finance Ministry that had to enter the state's debt rehabilitation programme. Its situation improved after it transferred 50 billion baht's worth of NPLs to the Islamic Bank Asset Management Co, which is wholly owned by the Finance Ministry, in return for 22 billion baht in promissory notes. The bank has now exited the programme.
The bank forecasts loan expansion of 10% this year, with a plan to extend a third to corporate customers and almost two-thirds to small and medium-sized enterprises. The remainder is slated for individual borrowers.