DUBAI (Reuters) – Sharjah Islamic Bank (SIB), which will conclude a series of investor meetings in London on Monday before selling an Islamic dollar bond, is aiming for double-digit credit growth this year, a bank executive told Reuters.
The lender plans to raise up to $ 500 million in its planned debt sale, which will increase its Tier 1 capital and total capital ratios, said Ahmed Saad, vice chairman.
“At the moment, the core capital of SIB is … not only strong, it is well above the requirements of the central bank of the UAE. We want to strengthen our capital for future growth opportunities. “
SIB had total assets of 44.7 billion dirhams (US $ 12.2 billion) at the end of last year. Its financing facilities increased to over 24.1 billion dirhams compared to 21.7 billion dirhams in 2017, an increase of 11%.
“We expect the growth of SIB’s assets and loans to match the growth of previous years,” Saad said.
The bank’s Basel III capital adequacy ratio – which banks have to comply with above certain thresholds as part of the regulatory reforms introduced in the wake of the financial crisis – was just under 18% at the end of 2018, above the Central Bank of the UAE’s target of 12.375%. he added.
Citi, HSBC and Standard Chartered have been appointed as coordinators of SIB’s planned bond issue and are joint lead managers and bookrunners, HSBC, with Abu Dhabi Islamic Bank, Bank ABC, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, KFH Capital.
SIB executives met with investors at a bond roadshow in Singapore and Hong Kong last week and will finalize preparatory meetings in London, according to a document from one of the banks leading the deal.
Depending on the market conditions, an issue of Additional Tier 1 Sukuk or Islamic bonds will follow.
SIB has no further plans to raise tier 1 capital in the medium term and has not had to raise funds through senior unsecured sukuk given its strong liquidity and no upcoming debt maturities, Saad said.
The bank – the only Islamic bank based in the Emirate of Sharjah – was not in talks with any other lender about potential merger opportunities, he added. ($ 1 = 3.6728 UAE dirhams)
Reporting by Davide Barbuscia; Editing by Keith Weir