DOHA: The shareholders of Qatar Islamic Bank (QIB) gave the nod to the bank to raise up to QR5bn ($1.37bn) through a capital boosting Sukuk here the other day.
The Bank’s extraordinary general assembly (EGM) gave the approval to the bank for the issuance of unlisted Sukuk that shall be eligible for inclusion as Addition Tier 1 Capital in accordance with Basel III, in compliance with the instructions of Qatar Central Bank (QCB).
The issuance may be in a phased manner during the course of the year, and will depend on the need of capital. “We need to maintain a healthy Capital Adequacy Ratio (CAR) in compliance with Basel III guidelines,” Bassel Jamal, Group CEO of QIB, told The Peninsula after the EGM.
“It’s a Sukuk with long-term maturity. It is not convertible into shares… the existing shareholders’ ownership will remain undiluted,” he added.
The details such as the exact amount to be raised, currency and profit rate that the bank will pay, would be decided in consultation with the specially designated members. “Once it’s done, we will go back to the QCB for final approval.”
Gourag Hemani, Chief Financial Officer, QIB, said: “The bank will predominantly be trying to sell the Sukuk to government and institutional investors, as and when required. It’s not going to be a retail issue. Initially, we propose to issue it within Qatar.”
The new Basel III banking standard, due to come into full force in 2019, oblige banks to set aside more capital. QIB’s total capital adequacy ratio, a combination of Tier 1 and Tier 2 capital, stood at 14 percent at the end of 2014 against a 12.5 percent minimum prescribed by QCB.
The ordinary AGM and the EGM approved all the items in the agenda in their respective meetings, including the board of directors’ proposal to distribute 42.5 percent cash dividends of the nominal value per share, meaning QR4.25 per share.
Earlier, addressing the general assembly, Sheikh Jassim bin Hamad bin Jassim bin Jaber Al Thani, Chairman of QIB, said the Bank remains committed to support the local economy through its innovative Shariah-compliant solutions offered to its large number of corporate customers who are handling major national projects across different sectors. The Bank continues to recruit and invest in local talent and fulfill its responsibility as a corporate citizen through its support to a number of social initiatives.
QIB, Qatar’s largest Shariah-compliant lender by assets, recorded a net profit of QR1.6bn ($439.38m) for the year 2014, which represents a strong 20 percent increase compared to 2013.
Earnings per share (EPS) reached QR6.78, compared to QR5.65 in December 2013.
Total assets of the Bank increased by 24 percent compared to 2013 and now stands at QR96bn driven by a robust growth in financing activities that have now reached QR60bn having added QR13bn, representing a 27 percent growth over 2013.
