Business | Banking

Albaraka cuts size of March sukuk

Albaraka Banking Group reduced the size of a March sukuk programme to $250 million

  • Bloomberg
  • Published: 00:00 February 9, 2011
  • Gulf News

Dubai:  Albaraka Banking Group reduced the size of a March sukuk programme to $250 million (Dh918 million)-$300 million from the planned $500 million, Chief Executive Officer Adnan Ahmad Yousuf said.

"We were programming to sell $500 million, but then we agreed to sell between $250 million and $300 million," Yousuf said in an interview in Damascus yesterday. "If there is demand, we will increase it." The bank also plans to issue a $100 million sukuk in Egypt at the end of the year, Yousuf said.

Albaraka said on January 5 it plans to sell as much as $500 million in Islamic bonds in the first quarter. The cost of borrowing through Islamic bonds has risen since anti-government protests began in Egypt two weeks ago on concern political instability may spread throughout the Middle East.

The yield on Islamic bonds has jumped 49 basis points since January 25, when protests in Egypt began, to 5.8 per cent on Febraury 7, according to the HSBC/Nasdaq Dubai GCC Dollar Sukuk Index.

The bank will spend $200 million to fund expansion in India and China, and $50 million in Indonesia, where Albaraka already has a representative office, Yousuf said.

"China and India are good markets to expand, especially India because it is very close to our Middle East market," he said. "Next month, I'm going to Indonesia to start again negotiation talks there to acquire a bank" Yousuf added, without providing details.

The Manama-based lender also plans to open its first branch in Paris in 2012 with an initial capital of €100 million ($136.5 million).

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