Al-Hilal Bank to issue debut sukuk this year
26 Sep 2013 05:33 GMT
 
Abu Dhabi: Al-Hilal Bank of Abu Dhabi government is planning to make debut in issuance of Sukuk in the last quarter of this year and it is expecting net profit growth of over 40 percent in the same year as well.

Abu Dhabi: Al-Hilal Bank of Abu Dhabi government is planning to make debut in issuance of Sukuk in the last quarter of this year and it is expecting net profit growth of over 40 percent in the same year as well.

This good news for the Sukuk industry was declared by one of the top executives of Al-Hilal Bank last week.

On the other hand, the five-year-old Islamic bank was assigned its first credit ratings earlier this week: an A1 from Moody’s Investors Service and A-plus from Fitch Ratings.

The bank plans global road shows for investors ahead of its $500 million sukuk issue, which would aim to diversify its funding and liquidity management, Mohamed Berro informed.

He stated, “There’s a scarcity of sukuk in the global market and there is liquidity looking for such sukuk. This will be a flight to quality for investors.”

Unlisted Al-Hilal Bank has picked Standard Chartered, HSBC and National Bank of Abu Dhabi to arrange the sukuk under its $2.5 billion bond program. Al-Hilal is wholly owned by the Abu Dhabi Investment Council, an investment arm of the government of Abu Dhabi, capital of the United Arab Emirates.

Some Abu Dhabi entities have deferred bond issues in recent months because of volatility in global markets.

“If market conditions are fair, Hilal will launch the sukuk,” Berro said.

The lender predicts growth of around 42 percent in profits for 2013. It earned a net profit of AED217 million ($59.1 million) in the first half of this year and expects around AED440 million profit for the full year, up from AED310 million in 2012, he said.

He continued, “Our mid and large corporate business and personal banking are the drivers.”

Growth in the bank’s loan book, now expanding at a rate of about 6 percent, could rise to “high single or low double-digit growth as economic growth picks up,” he said.

Most UAE banks have seen single-digit loan growth over the last two or three years. Al-Hilal’s total assets are expected to grow steadily from AED34.2 billion at the end of June 2013, he added.

The bank will continue to develop organically, adding at least two to three branches every year in the UAE, while overseas expansion will be based on an “opportunistic approach”, Berro concluded without elaborating. Al-Hilal Bank currently has 24 branches in the UAE.

The bank opened three branches in Kazakhstan after setting up the first Islamic bank in the former Soviet state in 2010.



-- Al Arabiya Digital


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