DIB to seek shareholders’ nod to raise $9 bn through sukuks

By CL Jose

To include $1.5 bn Tier 1 Islamic bonds

DUBAI/February 21-2021: Dubai Islamic Bank (DIB), region’s largest Islamic bank, is planning to establish mandate to raise up to $9 billion (AED33 billion) from the market through issue of sukuks.

While AED5.5 billion worth sukuks carrying coupon rate upwards of 6 per cent, including a Noor Tier 1 paper, are becoming callable during the first half of 2021, another sukuk valued at AED1.84 billion is maturing in March, 2021.

$1.5bn Tier 1 sukuk

While the bank eyes raising $7.5 billion through the issue of senior sukuks, the Islamic banking major plans $1.5 billion sukuk issue to boost the Tier 1 capital.

The bank will have the option to raise equivalent fund in any other currencies, if not in dollar, but these sukuks will not qualify for conversion into shares at any point in time.

Bank will seek the shareholders’ endorsement authorising the board of directors to work on the fund raising programme during the one year starting from the date of AGM scheduled to be held on March 16, 2021.

DIB that has recommended 20 per cent cash dividend aggregating an amount of AED1.45 billion for 2020, has been on a fast growth mode during the year despite the COVID challenges.

“The year 2020 is now history. Let’s not remember the year for its challenges. Instead let’s remember 2020 for what it has taught us, how humanity worked together globally to successfully overcome the most dreadful health crisis the world has ever faced. It is now time to look ahead,” said Mohammed Ibrahim Al Shaibani (seen in the picture), chairman of Dubai Islamic Bank (DIB).

The bank that concluded the acquisition of Noor Bank saw its asset base grow 25 per cent, from AED231.80 billion to AED289.56 billion during the year under review, whereas the Islamic financing and investing assets surged from AED150.91 billion to AED196.69 billion.

The Group net profit has declined by 38 per cent to AED3.16 billion during 2020. This, according to the bank, was primarily driven by a deliberate and pointed prudent approach to provisioning. The AED43.13 billion strong equity base of the bank is backed by Tier 1 sukuks valued at AED11.94 billion.

 

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