Amanah Bank on the road to profitability

March 1 2017 3:08 PM

The government-controlled Amanah Islamic Bank is expected to generate revenues, as it embarks on various expansion plans and product offering.

Newly-appointed Chairmen and CEO Dato’ Al-Iskandar, veteran banker, who took over the reins of the country’s only Islamic bank earlier this year, targets to make the back to profitability after registering losses for over two decades now.

Al-Iskandar said the Muslim communities have been sprouting all over Metro Manila and he is determined to tap the rapidly expanding market.

“We want to have them as depositors and clients but since we only have one branch in Metro Manila, we will introduce mobile banking, which is actually more convenient since clients can make banking transactions through their cell phones,” he said.

As an executive for banks like the Philippine National Bank
(PNB), and later the United Coconut Planters Bank (UCPB), he was tasked to manage the Middle East offices of these banks.

In the early 2000s, he went back to the Philippines and worked as a consultant for Amanah. With his banking expertise, coupled with his familiarity with Amanah’s operations, Al-Iskandar became the obvious choice to head the bank for the next six years.

Al-Iskandar expressed nothing but optimism for Amanah for
the coming years.

“The bank has been the through the worst already so there is no other way to go but up. It’s going to start going up this year,” he said.

Most of the bank’s operations are based in Zamboanga City and of the nine branches it has; only one is located in Luzon, particularly in the Development Bank'(DBP)’s Makati headquarters.

As the bank is being managed by DBP, it was prudent to move its only Luzon branch and executive offices to the DBP building.

With very little capital and with only nine branches throughout the country, he is ready to take the challenge to make it financially stable.

In 2007, it came to a point when Amanah, being a government
entity, owed the National Treasury over P500 million.

Thus the following year the Bangko Sentral ng Pilipinas (BSP) initiated a plan that would help the bank service the debt.

The bank made arrangements with the DBP to pay the money Amanah owed the National Treasury.

“In return, DBP gets to have a roughly 99 percent stake in Amanah, ” he said.

Al-Iskandar added that closing the bank was not an option
for the BSP since it was the only Islamic bank in the Philippines.

“Politically, it wouldn’t have been feasible to just shut the bank down. It would have meant lost opportunities for the country’s Muslims, who rely on Amanah to finance their businesses or livelihoods,” he explained.

Amanah was established in 1973 with a P50 million
capitalization to cater to the country’s Muslim population. As an Islamic Bank, it offers interest-free business loans to Filipino Muslims.

“Instead of charging interest to borrowers, Islamic banks take a small percentage of the profits of the business. But this is only when the said business is posting a profit. If it isn’t, the bank will not make any charges or demand any payment of sort,” said Al-Iskandar.

Likewise, the bank’s savings and checking accounts don’t
yield any interest for depositors but Al-Iskandar is drawing up a
profit-sharing scheme that will entitle clients and depositors to a percentage of the bank’s annual earnings.

Although a Maranao born in Dipolog City, Al-Iskandar has
been moving from one location to another since childhood. He said the family had to move whenever his father, who was in the military, was assigned to another station.

Al-Iskandar attended elementary school in Quezon City and majored in Political Science at the Mindanao State University in Marawi City. He obtained his MBA at the Asian Institute of Management (AIM).