IslamicFinance.de

The Government Savings Bank (GSB) will continue to focus on supporting government projects, including possible mergers with the ailing Islamic Bank of Thailand and SME Bank. The bank has targeted non-performing loans (NPLs) at 1.15% of total loans this year. Moreover, it aims to achieve an increase in lending this year of 8.5% or 142.8 billion baht. According to the bank's president and chief executive Worawit Chailimpamontri, mergers with the Islamic Bank and the SME Bank have made no progress, but will be pursued if the government needs GSB as a solution to fix the problem. GSB also plans to open 90 new branches nationwide this year, and to launch new services while upgrading information technology and staff skills.

Due to complete management failure, two state-controlled banks, the SME Bank and the Islamic Bank of Thailand, are now dealing with bad loans in excess of 80 billion baht. This management failure is collective, whether it be the executives and directors of the two banks, the political leadership which appointed both or the Finance Ministry officials tasked with supervising the institutions. The problems at the institutions are conflicts in terms of policy direction, internal fraud and corruption and management inefficiency at the board, senior executive and staff levels. The public didn't create the troubles at these banks, but now must shoulder the cost of fixing them.