The Islamic Bank of Thailand plans to raise between US$70 million and US$200 million via Islamic bonds in Malaysia and Middle East countries by the end of the year, according to the bank’s chairman Professor Somchai Virunhapol.

Malaysia´s second-largest banking group CIMB, via its newly-acquired BankThai, has approached the Islamic Bank of Thailand (IBT) to launch the sukuk bonds in Malaysia, said Somchai.

This will mark the first time Thailand is issuing sukuk bonds, noted Somchai, adding that other targeted countries besides Malaysia are Kuwait, Bahrain and the United Arab Emirates.

"We have already held talks with CIMB on the scope of cooperation, but no figures have been discussed as yet. Similarly, we received very good response from the Middle East countries during our visit there a month ago," he said on the sidelines of the Third
Thailand Islamic Finance Conference held in March.

Global Islamic financing products are estimated at US$1 trillion, with annual growth of between 10 percent and 15 percent.

Somchai said there is the potential for sukuk bonds and other shariah-compliant financing products to be issued in Thailand itself. The Thai government, he added, has estimated that about 20 percent of financing for a projected US$100 billion investment in mega projects over the next 10 years would come from such financing products.

Somchai said that the IBT plans to open three new branches this year from its current 26, adding that it has over 100,000 savings account holders.

"There are about eight million Muslims in Thailand and we are tapping a niche market with very big potential," he explained.

The IBT was established in 2003 to offer financial services in compliance with Islamic law and to serve the country´s Muslim population. The Thai Finance Ministry is the largest shareholder with a 48.54 percent stake in the bank.