Islamic Development Bank triples capital
Dubai, May 22, 2013
Islamic Development Bank , which provides financing and loans in Muslim countries, has more than tripled its authorised capital to $150 billion to better support development projects in its 56 member nations, the bank said on Wednesday.
The increase in capital, which was last raised in 2006, will allow the IDB to finance more and bigger schemes, said Davlatali Saidov, chairman of the IDB board of governors.
Energy, transportation, and water and sanitation projects make up about 60 percent of the portfolio of the AAA-rated IDB, which also sets up and manages funds in accordance with sharia principles.
The bank, whose largest shareholder is Saudi Arabia with 23.6 percent, has also mandated six banks for a five-year $1 billion sukuk, or Islamic bond, which will be dually listed in London and Malaysia.
The IDB added that it would tap the sukuk market periodically in the future but gave no details.
The joint lead managers of the sukuk are Qatar's Barwa Bank, BNP Paribas, CIMB, HSBC, NCB Capital - the investment banking arm of Saudi's National Commercial Bank - and Standard Chartered Bank.
Earlier this month, IDB president Ahmad Mohamed Ali called for the creation of a global sharia advisory board to establish greater uniformity within Islamic financing, which has its centres in the Middle East and southeast Asia.
Adopting a centralised format for supervising sharia-compliant banking products is gaining favour across the globe, as regulators seek to standardise industry practices and improve consumer perceptions.
Islamic banking assets at commercial banks reached $1.55 trillion globally at the end of 2012, and are projected to exceed $2 trillion by 2015, according to consultants Ernst & Young.-Reuters