MANILA, Philippines - Al-Amanah Islamic Bank of the Philippines is still on the selling block as majority shareholder Development Bank of the Philippines (DBP) awaits regulatory approval to unload in the lender.
“The instruction of the Department of Finance is for DBP to divest its investment in Al Amanah,†Idiosa Ursolino, senior vice-president and operations chief of Al-Amanah, told reporters on the sidelines of the launch of shariah-compliant firms at thePhilippine Stock Exchange.
“DBP is now in the process of preparing the package for the divestment,†she added.
State-run DBP owns 99 percent of commercial bank Al-Amanah. In 2009, DBP took over the lender’s management from the Bureau of the Treasury, allowing it to expand operations in Mindanao.
“We are business as usual but on a limited scale because of limited capitalization,†Ursolino said.
DBP is still awaiting the approval of the Governance Commission on government-owned and controlled corporations, the Bangko Sentral ng Pilipinas and the Philippine president for the divestment.
“There are no approvals yet but it is on process,†Ursolino said.
The sale will allow Al-Amanah’s privatization, which is expected to boost its balance sheet after incurring losses for 17 years under the hands of the government.
Al-Amanah is the country’s only Islam-oriented commercial bank. It adheres to Muslim teachings and as such, does not charge interest to its clients but instead earns like an equity investor to its borrowers by forging partnerships, lease-to-own deals and similar arrangements.