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Al Hilal Bank to issue Dh1.8b sukuk in quarter 2 or 3 of 2013

Bank wants to raise capital without diluting the current shareholders’ equity

Image Credit: Francois Nel/Gulf News Archive
Al Hilal Bank in Bur Dubai.
Gulf News

Abu Dhabi: 
Al Hilal Bank is likely to issue Dh1.8 billion ($500 million) sukuk (Islamic bond) in quarter two or three of 2013, Mohammad Berro, CEO of Al HIlal Bank, told Gulf News.

“We will be issuing suku worth $500 million and most probably in Q2 or Q3 of 2013,” said Berro.

He said that the bank, wholly owned by the Abu Dhabi Investment Council, an investment arm of the government of Abu Dhabi, has 11 per cent of the Islamic finance market share in the UAE.

Marwan Shurrab, vice-president and chief trader at Gulf Mena Investments, said that the sukuk issue is aimed at raising capital without diluting the current shareholders’ equity.

“With bonds, corporations can often borrow at a lower interest rate than the rate available in banks. Therefore, the bank benefits from the low yield environment to further refinance and strengthen their balance sheet as well as to expand,” said Shurrab.

Al Hilal Bank’s net profits increased in 2012 to Dh320, up from Dh202.3 million, by more than 55 per cent, said Berro.

He said that Al Hilal is ranked 3rd in UAE Islamic banks and 10th in terms of assets.

“Al Hilal stands at third place among UAE Islamic banks. Assets, customer deposits and profitability are up in 2012, reflecting the bank’s ability to operate successfully ina challenging marke,” said Berro.