First Gulf Bank To Set Up $1.07bn Sukuk In Malaysia

Funds from the programme will go toward expanding the bank's day-to day business.

Abu Dhabi’s First Gulf Bank, the third-largest bank by assets in the United Arab Emirates, will raise 3.5 billion ringgit ($1.07 billion) with Islamic bonds in Malaysia, according to a statement on Thursday by credit rating agency RAM Ratings.

The Islamic bond, or sukuk, program will be issued by the bank’s funding unit, FGB Sukuk Company II Ltd. RAM rated the program ‘AAA’ or Stable on the bank’s size and high likelihood of government support, as the Abu Dhabi ruling family owns 64 per cent of the firm.

First Gulf Bank follows numerous institutions to find funding in Malaysia’s sukuk market, the world’s largest. More than two-thirds of global sukuk issuance in the first half of 2013 took place in Malaysia, followed by Saudi Arabia and the UAE.

“The ratings also incorporate the bank’s excellent profitability, robust capitalisation, expanding franchise and moderate asset quality,” said RAM.

Funds from the programme will go toward expanding the bank’s day-to-day business. RAM did not indicate when the first issuance will take place.

(Gulf Business / 06 March 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Pakistan: Summit Bank launches Islamic banking

KARACHI: Summit Bank Limited has launched its Islamic Banking with setting up new branch in Karachi with a plan to convert overall banking operation from conventional to Sharia-compliant in the next three years.

 The bank has been established with Rs 1 billion equity in accordance of mandatory operations requirement of starting operations with the capital driven through non-interest source.

 Hussain Lawai, President and CEO of Summit Bank said that bank will convert its 4 branches into Islamic from conventional whereas it will add 15 new branches in the calendar years mainly in provincial capitals and big cities.

 These branches will play a crucial role in setting business strategy of the bank through providing experiences including issues and success in the Islamic banking.

 The bank will set its new direction through operations of its branches and rapidly convert its branches from conventional to Sharia-based.

 The bank’s management has first decided to open a window or division of Islamic Banking side by side with its conventional banking but it planned to full-fledge bank through migration of interest-based banking to Islamic banking, veteran banker.

 The Islam bank has been planned to grow with 20-30 percent annual rate which is possible though not challenging or impossible due to rising awareness of Islamic banking in the country.

 The growth of Islamic Banking is immense in Pakistan standing 30 percent annually as compared with conventional banking industry that standing at 10-12 percent per annum. Summit Bank is operating currently with 187 branches in the country. It is imparting its leading role bringing remittances inflows in Pakistan to be the six largest players in this business. Lawai said Summit Bank has increased its home remittances services with partners like Ufone, a cellular phone company, to be the six largest contributor of processing home remittances in the country. 

(Daily Times / 08 March 2014)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com