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DIB Pakistan Issues PKR 4 Billion Tier-II Sukuk

PRESS RELEASE

DIB PAKISTAN ISSUES PKR 4 BILLION TIER-II SUKUK

KARACHI, Pakistan, July 25, 2017: Dubai Islamic Bank Pakistan Limited (DIBPL) announced the successful issuance of its Rated, Unsecured, Subordinated and Privately Placed Tier-II Mudaraba Sukuk. The PKR 4 Billion Sukuk issue was oversubscribed by 1.7 times the issue size reflecting strong demand and confidence by the investors in one of the leading global brands in Islamic Banking.

DIB Pakistan is a wholly owned subsidiary of Dubai Islamic Bank PJSC, UAE (DIB). DIB was established in 1975 as the world’s first Islamic Bank in the UAE. With Group assets of USD 50 Billion, a market capitalization of around USD 7.0 Billion, and workforce of more than 8,000 employees within the group, the organization is fast being recognized as a formidable force in Islamic Finance and one of the most progressive Islamic Finance institutions in the world. Currently, DIB has presence across all Emirates in the UAE with growing international operations in South Asia, Far East, Middle East, Europe and Africa.

The Credit Rating of DIBPL was recently upgraded by JCR-VIS from “A+” (Single A Plus) to “AA-“ (Double A Minus) for Medium to Long Term and “A-1”(A One) for Short Term with Stable outlook. During 2016, DIBPL pursued a consolidation strategy which has resulted in significant improvement in financing and deposit mix. Asset quality indicators of the bank compare favorably to peers. Profit before tax of the bank increased by 93% during 2016 on the back of improvement in core profitability. The ratings are underpinned by the projected growth in profitability, improved efficiency and sustained asset quality indicators.

The Sukuk Issue is rated A+ (Single A Plus) by JCR-VIS Credit Rating Company Limited. The Sukuk has a 10 year tenor and carries an expected profit rate of 50 basis points per annum over 6 Month KIBOR. The Sukuk is redeemable at maturity and has a Call Option which is exercisable after 5 years.

This landmark transaction was executed following a meeting of the Board of Directors of the Company on June 1, 2017 to shore up the bank’s Capital Adequacy Ratio (CAR) in line with Basel III requirements keeping in view the bank’s increasing financing portfolio. The issuance received interest from a diverse range of financial institutions including banks, mutual funds and insurance/takaful companies. In total, a number of 26 institutional investors participated in the issue.

Mr. Junaid Ahmed, Chief Executive Officer of Dubai Islamic Bank Pakistan Limited, speaking at the occasion said, “This Sukuk issuance will provide the much needed impetus to the bank to continue with its financing activities focusing on Corporate, SME, Commercial and Consumer Banking. The bank has received an overwhelming response from the market and we were able to close this transaction within a record time thanks to timely approvals granted by State Bank of Pakistan“.