11 Sept 2006
Dubai: Sharjah Islamic Bank, the UAE's third-biggest Islamic bank, plans to float a long-term sukuk in the last quarter of 2006 to fund expansion, its chief executive said yesterday.
Hussain Al Qemzi told reporters the bank had not taken a decision yet on the size of the issue but the sukuk was "a kind of a securitisation" of its real estate assets.
Lead managed by HSBC bank, the Islamic bond will be floated in both local and foreign markets.
"The money is going to be reinvested in our projects, in our assets," Qemzi said after the inauguration of Sharjah Islamic Financial Services, its new brokerage unit.
"We have many projects coming up, major developments in real estate, in the hospitality industry in Sharjah. We will also be financing our regular assets in our balance sheet."
Qemzi also said the bank will nearly double its branch network in 2006 to 17 from nine at the end of 2005 as part of a plan to expand its retail network.
He said the growth in the bank's core banking activities was strong and it was diversifying its revenue streams to ensure stable, long-term growth.
Sharjah Islamic Bank has a small exposure to the UAE equity markets and was marginally affected by the sharp share price fall in the second quarter, he said, adding he expected the markets to recover by the year-end.
The bank reported a 7.2 per cent decline in net profit in January-June 2006 from a year ago to Dh91.32 million after writing off Dh17.3 million in losses on its investment portfolio.
Shares of Sharjah Islamic Bank closed 1.61 per cent lower yesterday at Dh3.06 on the Abu Dhabi Securities Market.
Sharjah Islamic's new brokerage unit has licences to trade on both the Dubai and Abu Dhabi markets.
"SIB's entry into brokerage comes after our successful entry into the hotel and tourism sector. This forms a part of our expansion scheme, which includes more delivery channels for our customers, strengthening and improving our existing operations and extending our operations into various industry sectors," Qemzi said.
By Arif Sharif
Gulf News 2006. All rights reserved.
