Dubai Islamic Bank to boost capital via sukuk issue

DUBAI: Dubai Islamic Bank (DIB), the largest syariah-compliant lender in the emirate, plans to boost its capital through a syariah-compliant debt instrument, the lender said yesterday.

The bank will hold investor meetings in Asia, Middle East and Europe starting March 7 ahead of issuing the US dollar-denominated, benchmark-sized hybrid sukuk, subject to market conditions.

A benchmark-size offering is understood to be at least US$500 million (RM1.5 billion).

The potential sale will be arranged by Emirates NBD , HSBC Holdings, National Bank of Abu Dhabi, Standard Chartered and DIB itself.

The public sale of a debt instrument to raise Tier-1 capital is rare in the Middle East, and follows November's issuance by Abu Dhabi Islamic Bank of a US$1 billion Tier-1 sukuk.

The DIB sukuk will be classified as deeply subordinated, with proceeds used to strengthen the bank's tier-1 one or core capital, a key measure of a bank's financial strength, rather than booked as a liability on its balance sheet. Reuters