Thai Islamic bank swings to profit, trims bad debt
Feb 5 (Reuters) - State-owned Islamic Bank of Thailand has swung to profit in 2013, as it continues to trim its bad debt portfolio while growing deposits and expanding small-business lending.
The only sharia-compliant lender in the country made an unaudited profit of 2.7 billion baht ($82.4 million) last year, compared to a loss of 13.25 billion baht a year earlier, the bank said in a statement.
Non-performing loans were cut by more than 20 billion baht last year, with about 27 billion baht of NPLs left on its balance sheet. Management now aims to increase capital levels to comply with regulatory requirements.
Islamic Bank of Thailand, set up in 2003 as a state enterprise under the Ministry of Finance, said it had faced several problems in 2013 which affected its image and clients' confidence, leading to a liquidity crisis.
It did not elaborate, but local media reported the bank's president resigned last June after pressure from employees who were dissatisfied with some of his policies.
The bank, rated BBB- by Fitch, now plans to increase loans by 20 billion baht, focusing on small and medium-sized businesses and retail clients, while growing deposits by about 25 billion baht in 2014.
It said it maintained plans to issue sukuk, or Islamic bonds, this year to support expansion plans.
Last year, the bank said it would seek investors to establish a presence in the Middle East in the next three years, while also seeking to increase its domestic branch network. ($1 = 32.7800 Thai baht) (Reporting by Bernardo Vizcaino in Sydney and Orathai Sriring in Bangkok; Editing by Andrew Torchia)
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