Sukuk issue: Bank Islami plans to raise Rs3.5b

ABU DHABI:

Bank Islami Pakistan plans to raise Rs3.5 billion ($34.8 million) via subordinated sukuk, a bank official said.

With Basel III global banking standards being phased in around the globe, several Islamic banks have issued such capital-boosting instruments, including those in Turkey, Malaysia, Saudi Arabia and the United Arab Emirates. Last week, Bank Islami’s board of directors approved a plan to raise Tier 2 capital in tranches of Rs500 million to help fund its expansion, the Karachi-based lender said in a bourse filing.

The issuance of the first sukuk tranche, which still requires regulatory approval, could be as early as this quarter, chief financial officer Zahid Jamall said.

The bank is also in the process of issuing shares worth Rs4.3 billion, which would help it meet central bank regulatory requirements and keep pace with double-digit growth in its financing book.

Published in The Express Tribune, January 15^th, 2015.

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