Meezan Bank to Raise Rs 7 Billion via Sukkuk Bonds

Meezan Bank to Raise Rs 7 Billion via Sukkuk Bonds

 Meezan Bank restricted has planned to boost up to Rs7 billion by supply Tier one Islamic bond or Sukkuk within the coming back few months, in step with the business officers.

The Sukkuk would be an in-camera placed, tradable, and unlisted supported Mudarabah structure—a style of investment management partnership.

“The issue is going to be initial Shariah-compliant Tier one Sukkuk in the Asian nation, whereas the aim for mercantilism a Sukkuk from the bank is to prop up its capital adequacy magnitude relation,” told a supply, United Nations agency is at home with the matter.

“The bond is going to be issued by the method of book building, presumably in Gregorian calendar month or July. The point in time for receiving an expression of interest from the investors is could thirty, 2018.”

The total issue would be Rs five billion with an inexperienced show choice of Rs2 billion. The minimum investment is going to be set at Rs one.0 million. Tenure is perpetual and might be born-again into a share as per central bank’s laws, in step with the info provided by the official.

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The bond can supply profit payment monthly. the speed of coming back on the Sukkuk are going to be 3-month KIBOR and one.75 p.c supported profit weightages allotted within the Mudarabah pool.

The basic aim behind the supplying of Sukkuk is to fulfill the regulative demand of automobile (capital adequacy ratio). when flourishing supplying of the Sukkuk, Meezan Bank’s automobile can improve considerably.

The bank expects the bond to be the sold thanks to its attractiveness.

Industry sources aforementioned it'll be terribly enticing for Islamic banks, Islamic banking windows of standard banks, Takaful corporations, Modaraba corporations, pension funds, Shariah-compliant investment by corporations and alternative entities. In 2016, Meezan Bank had raised Rs seven billion through Tier a pair of Sukuk.

The capital adequacy magnitude relation of Meezan Bank is at twelve.89 p.c in 2017.

The banking concern of Asian nation (SBP) and therefore the bank’s board had already approved plans for the supplying.

The Islamic bank is exploitation of the native currency Sukkuk market to boost instruments that boost their capital. they're conjointly mercantilism bonds that enhance core Tier one capital.

Meezan Bank is one in every of the quickest growing Islamic banks within the country and presently the seventh largest bank. For the primary quarter all over March thirty-one, 2018 Meezan Bank’s profit when tax redoubled by twenty-seven p.c to Rs one.91 billion up from Rs one.51 billion within the preceding quarter of last year.