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Dubai Islamic Bank Repays $750 Million Sukuk It has been reported Dubai Islamic Bank (DIB) announced that it has repaid in full a US$750 million five-year Sukuk, which matured on March 22, 2012, from its own sources, demonstrating the bank’s finan- cial strength and comfortable liquidity po- sition. Issued in March 2007, the Sukuk was over- subscribed by three times, with 45% alloca- tion in the Middle East, 25% in Asia and 30% in Europe, underscoring the regional and international market confidence in DIB. The only capital market issuance done directly by DIB, the Sukuk was issued through a spe- cial purpose vehicle, DIB Sukuk Company Limited, established in the Cayman Islands, and was the first Sukuk to be listed both on the Dubai International Financial Exchange (DIFX) and the London Stock Exchange.
Dr. Adnan Chilwan, Deputy CEO – Chief of Consumer and Wholesale Banking, DIB, said: “The repayment of the Sukuk in full is a clear demonstration of the financial strength of DIB. The ability to repay from our own resources without the need to refinance is testament to the robust fundamentals we have built over the past years. The inves- tor confidence gained by the Sukuk across a wide geography further highlight our cre- dentials in successfully strengthening our funding sources, despite the challenging market conditions that prevailed globally. We will continue to explore potential oppor- tunities to expand our funding sources in the future.”
DIB reported an operating profit of AED 1.03 billion for 2011 while net profit increased to AED 1.01 billion. DIB’s total assets stood at AED 90.59 billion and the bank’s customer base continued to expand, with customer deposits reaching AED 64.77 billion at the end of 2011, and liquidity position comfort- able at 74% Advances to Deposit ratio (ADR). Recently, Tamweel a mortgage finance com- pany majority owned by DIB, launched its own US$300 million five- year Sukuk which was fully subscribed by the market. Dubai Islamic Bank (DIB), established in 1975, is the first Islamic bank to have incorporated the principles of Islam in all its practices and is the largest Islamic bank in the UAE. DIB is
a public joint stock company, and its shares are listed on the Dubai Financial Market. The bank enjoys a reputation as a leader and in- novator in maintaining the quality, flexibility and accessibility of its products and servic- es. The bank currently operates 74 branches in the UAE.
DIB has been proactive in creating partner- ships and alliances at both the local and in- ternational level. The bank has established DIB Pakistan Limited, a wholly owned sub- sidiary which has a network of 64 branch- es across 26 major cities in Pakistan. DIB has also started operations in Jordan, with the establishment of Jordan Dubai Islamic Bank. DIB has earned the respect of its peers around the world for many years, and its leading position has been reaffirmed by the 79 local, regional and international ac- colades that it has won between 2008 and 2010.
DIB has won awards across diversified areas, including retail, corporate and investment banking, as well as CSR and consultancy services. The bank’s most recent awards include being named “Best Islamic Bank in UAE” for the fifth consecutive year by Islamic Finance News, “Best Islamic Bank” in the UAE for 2010 by NY-based Global Finance magazine, “Best Islamic Bank in the UAE” by Asia money magazine, and being named win- ner of the first ever pan-Arab emea finance award for corporate social responsibility.
Islamic Finance Assets Reported at $1.3 trillion in 2011 It has been reported that a new report from TheCityUK’s UK Islamic Finance Secretar- iat (UKIFS) indicates that Islamic finance assets worldwide continued a long run of growth to reach an estimated $1.3 trillion in 2011, 150 per cent up over the previous five years. Despite political unrest in some countries the industry has continued to expand, not only in its core markets of the Middle East but also in South East Asia and offshore ju- risdictions such as Bermuda. Islamic funds, for example, reached a new high of $58 bil- lion in 2010, with the available pool about ten times larger at over $500 billion. Even so, competition is fierce, with average man- agement fees worldwide down from 1.5 per
cent in 2006 to 1.0 per cent in 2011. Keith Phillips, Executive Director, UKIFS, com- ments, “Our report once again shows that the UK continues to maintain its position as the leading Western provider of Islamic finance with assets of $19 billion. “The UK also benefited from a globally buoyant Su- kuk market in 2011, with issuance up 60 per cent to $84 billion.
This was reflected in ten new Sukuk listings on the London Stock Exchange’s markets in 2011 and two in early 2012. There are now 37 Sukuk with a combined value of $20 bil- lion listed on the London Stock Exchange’s markets. Additionally, seven exchange trad- ed funds and two exchange traded products are also listed on these markets.”
In the UK, banks, Sukuk issuance and ex- change traded products are buttressed by the strong infrastructure of professional sup- port for Islamic finance deals and transac- tions. This includes over 25 major law firms and the largest four professional services’ firms, and this has yet to be seriously rivalled by any other European financial centre.
The UK is also making an increasing contri- bution to the development of Islamic finance education and skills with four professional institutions and 10 universities and busi- ness schools offering qualifications. These include the Chartered Institute of Manage- ment Accountants, Cass Business School, the University of East London and Durham University. With Shariah-compliant finance utilised for the redevelopment of Chelsea Barracks and the construction of the Shard of Glass in London, Islamic finance also has a crucial role to play in infrastructure devel- opment in the UK.
Considerable potential exists for expansion of the industry worldwide, although appropri- ate legal and regulatory structures are cru- cial for its development in individual coun- tries. The work that is now being undertaken through UKIFS with its six practitioner-led work streams covering topics from wholesale banking to skills is looking to address these issues by creating more efficient structures and processes and applying greater innova- tion to drive market development.
2012 April Global Islamic Finance 9
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