Middle East investor explored for Nava: IBank considers aircraft leasing [Bangkok Post, Thailand]

Aug. 18--The Islamic Bank of Thailand is in talks with a Middle East-based bank about an investment in Nava Leasing, which could lead to opportunities for expansion into aircraft leasing, says the bank's president, Dheerasak Suwannayos.

The foreign financial institution is the regional leader in aircraft leasing and wants to use Thailand as a base for business expansion in Southeast Asia, he said.

IBank will become the major shareholder of Nava with a 49% stake after completing a tender offer for the leasing company next month. The unnamed foreign bank could be a strategic partner of Nava or may consider a joint venture.

In the case of the joint venture, Nava may raise capital by offering new shares in a private placement to the foreign institution. IBank would maintain at least 49% in Nava but consider selling all shares to the foreign bank depending on the business plan of the overseas investor.

"The bank would consider the business scale of the investment in Thailand by the prospective strategic partner before making a decision on a Nava share sale," said Mr Dheerasak. "We believe the investment would provide benefits to the country, particularly in building up the country's Islamic financial infrastructure, as well as greater chances for business expansion."

If the bank decides to sell all of its shares in Nava, it would search for another acquisition opportunity in the business segment.

In another development, Mr Dheerasak said the bank had ended talks about acquiring shares in struggling Finansa Life Insurance because of a disagreement over shareholdings.

State-owned IBank wants to hold a maximum stake in the insurer at 49%, which would allow Finansa to remain a private company and promote flexibility in management. But Finansa wants the bank to own its all shares. As a result, IBank has cancelled the deal and is looking for other opportunities.

He said the bank was talking with many smaller insurance companies, both life and non-life, about share purchases. Negotiations would be easier with smaller firms and a small portfolio would not be a problem for the bank because the portfolio could be developed in line with Islamic financial principles.

For the insurance business, IBank wants to hold a maximum stake of 49% in the beginning and may divest shares later depending on returns on investment and the bank's business strategy.

IBank booked loan growth of 56 billion baht for the first seven months of the year, close to its full-year target of 60 billion. It said non-performing loans were being controlled at satisfactory level of 6% of the portfolio.

Despite new NPLs rising from customers in southern provinces due mainly to continuing unrest, existing bad debts continued to decline under good management, said Mr Dheerasak.

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com/.

Copyright (c) 2010, Bangkok Post, Thailand

Distributed by McClatchy-Tribune Information Services.

For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com, e-mail [email protected], or call 866-280-5210 (outside the United States, call +1 312-222-4544)