Al Hilal Bank eyes $500m sukuk issue in Q4
Abu Dhabi, September 11, 2013
Abu Dhabi government-owned Al Hilal Bank expects net profit growth of over 40 percent this year as it prepares to make a debut sukuk issue of $500 million in the fourth quarter, its top executive said on Wednesday.
Earlier this week, the five-year-old Islamic bank was assigned its first credit ratings: an A1 from Moody's Investors Service and A-plus from Fitch Ratings.
The bank plans global roadshows for investors ahead of its sukuk issue, which would aim to diversify its funding and liquidity management, Mohamed Berro told Reuters.
"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 has picked Standard Chartered, HSBC and National Bank of Abu Dhabi to arrange the sukuk under its $2.5 billion bond programme.
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 217 million dirhams ($59.1 million) in the first half of this year and expects around 440 million dirhams profit for the full year, up from 310 million dirhams in 2012, he said.
"Our mid- and large corporate business and personal banking are the drivers," Berro said.
Growth in the bank's loan book, now expanding at a rate of about 6 per cent, 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 34.2 billion dirhams at the end of June 2013, Berro 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 said without elaborating. Al Hilal 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. – Reuters
More Finance & Capital Market Stories
- NBAD approves 40pc cash dividends
- NBAD sees 8-10pc loan growth
- Al Basel Group launches investment arm
- Union Insurance posts $18m profit
- Oman warns banks on conflicts of interest
- Japan to lend Tunisia $480m
- 400 to join anti-laundering seminar in Riyadh
- Lebanese insurer to head Prague Club
- UAE's first REIT plans $135m IPO
- Bahrain banking industry outlook 'positive'
- New India Assurance opens Bahrain branch
- Qatar sets up mixed business incubator
- Kuwait budget spending up 8pc in April-Jan
- Thomson Reuters to host Mena IFR awards
- ADIB offers smartphone industry investment
- Gulf Finance House to start $3bn Tunisia project
- KFH completes ICT project upgrade
- Egypt urban annual inflation slows to 9.8pc
- BIBF signs deal with Palestinian institute
- Bahrain’s GDP set to expand 12pc
- KFH-Bahrain rebrands priority banking
- Bank Nizwa wins top Islamic bank award
- Qatar labour costs may jump: IMF
- Kuwait Q3 trade surplus hits $23bn
- Dubai trade growth up 7.6pc to $362bn
- Deloitte appoints new managing director
- Al Ramz tops UAE trading in Feb
- IFC in $150m loan deal with Bank Audi
- SME funding focus for Abu Dhabi forum
- Insurance House posts second year of profit