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THAILAND: In
a bid to grow its business, Islamic Bank of Thailand (IBank), the
country’s state-owned Shariah compliant financial institution, has
established partnerships with three Thai insurers to boost its
bancaTakaful operations.
IBank contracted an MoU with Thai
Life Insurance, South East Insurance and Muang Thai Life Assurance on
the 3rd June 2014, to stimulate its Takaful (long-term
savings and protection) operations and provide life and non-life
insurance products to clients.
According to Kanchit Singsuwan, the
acting managing director of IBank, the bank will focus more on driving
fee income to reinforce the bottom line, given that several banks were
strongly promoting products that bring in healthy fee income. He
highlighted that while the trend for interest income is likely to be
stable, fee income from bancaTakaful offers a brighter outlook.
The collaboration with the three
insurers is expected to generate combined contributions of
THB500million (US$15.27 million) to IBank by the end of the year, while
fee income from selling products to the three companies is expected to
reach THB30 million (US$916,017). Singsuwan further explained that
currently, fee income accounts for 5% of all IBank’s income, with the
biggest contributor being bancaTakaful. By virtue of the MoU, the bank
is aiming for a 10% increase in the fee-income ratio by the end of
2014.
Apart from engaging strategic
partners, IBank also looks to fund its expansion plans with a Sukuk
auction sometime this year. For the 2013 financial year, the Islamic
bank announced an unaudited profit of THB2.7 billion (US$82.27 million)
against a THB13.25 billion (US$403.72 million) loss in 2012. Following
a THB20 billion (US$609.39 million) reduction in non-performing
financing (NPF) in 2013, approximately THB27 billion (US$822.68
million)-worth of NPF remains on its balance sheet.
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