Gov't to raise Al Amanah Bank capital to P1 B

The National Government will offer some P950-million worth of shares of Al Amanah Islamic Investment Bank of the Philippines (Islamic Bank) by April this year to pave the way for the bank's privatization.

Asset Privatization Trust chief executive trustee Renato Valdecantos told The STAR that there is a need to issue new shares of the bank to enable it to raise its authorized capital stock to P1 billion.

He said of the authorized capital stock of P1 billion, about P50 million was subscribed and paid up.

According to Valdecantos, the offering of the shares to investors would be done through public bidding.

Once privatized, he said the government stake in the bank would be diluted. Aside from the National Government's exposure in the bank, various government financial institutions also hold shares of stock in the bank.

The National Government owns about 59.73 percent of the bank, while the Development Bank of the Philippines, Social Security System and Government Service Insurance System own 10 percent each with APT having a 0.45-percent stake.

He said the National Government and the GFIs would be also sell their shares in the bank.

Valdecantos said there are already a number of investors, both foreign and local, who have expressed keen interest in buying the bank. Most of the foreign investors are from Muslim countries such as Saudi Arabia, Malaysia and Indonesia.

According to the APT official, they have already sent a notice to the shareholders of the bank to exercise their pre-emptive rights.

The Committee on Privatization (COP) approved the privatization of Islamic Bank last year.

Valdecantos said they have not yet identified the present value of the bank since the DBP has yet to submit its valuation results. DBP is tasked to be the disposition entity of Islamic Bank.

The Islamic Bank will need fresh capital in order to be viable. Its meager capitalization of P50 million which is the original capitalization in 1973 when it was established has been completely eroded by operating losses. The fresh capital will be needed to upgrade the facilities, embark on a computerization program and hire new personnel.