DGAP-News: Islamic Development Bank Triples Authorised Capital to US $150 Billion
(firmenpresse) - Islamic Development Bank.
23.05.2013 02:15
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DUSHANBE, Tajikistan, 2013-05-23 02:15 CEST (GLOBE NEWSWIRE) --
The Islamic Development Bank's Board of Governors (BoG) today approved to more
than triple the Bank's authorized capital to 100 billion Islamic Dinars (about
US$150 billion) from 30 billion, reflecting the Bank's strong balance sheet and
the growing economic development needs of its 56 member countries. The BoG also
increased the Bank's subscribed capital from 18 billion to 50 billion Islamic
Dinars.
At its annual meeting in Dushanbe, the Bank also announced it will immediately
tap the public market with a US$1 billion offering of sukuk, or
Sharia-compliant bonds. The five-year offering is rated Triple A by each of the
three major bond rating agencies (Standard&Poor's, Moody's and Fitch), and
will be dually listed on the London Stock Exchange and Bursa Malaysia.
The benchmark $1 billion offering comes amid strong demand and limited supply
of the highest quality fixed-income securities, in part because a number of
large governments have recently lost their Triple A status. There has also been
growing demand for Islamic-compliant investments.
'The tenets of Islamic banking have stood the test of time,' said Dr. Ahmad
Mohamed Ali, President of the IDB Group. 'Our emphasis on equity, risk-sharing
and partnership enforces discipline on the financial system, allowing us to
lift more of our people out of poverty.'
The Bank has been designated as a Zero Risk Weighted Multilateral Development
Bank by the Basel Committee on Banking Supervision and the Commission of the
European Communities.
Saudi Arabia, with a 23.6% stake, has the largest ownership in the Bank,
headquartered in Jeddah, followed by Libya with 9.5%, Iran with 8.3%, Nigeria
with 7.7% and the United Arab Emirates with 7.5%. The next four biggest holders
are Qatar (7.2%), Egypt (7.1%), Turkey (6.5%), and Kuwait (5.5%).
IDB provides project financing to diverse regions of the world, including a
number of Less Developed Countries that constitute part of its membership.
Although energy, transportation, and water and sanitation projects make up
about 60% of the Bank's portfolio, it has recently stepped up its commitments
in agriculture, education, health and other social services. IDB is also
investing $250 million in a Youth Employment Support program in five member
countries: Tunisia, Egypt, Yemen, Libya and Bahrain.
Last year, the Bank partnered with the Bill&Melinda Gates Foundation to
provide $227 million to Pakistan for polio eradication. The Foundation paid all
the associated fees and mark-ups in advance, while Pakistan benefited from
concessionary financing. 'Health and agriculture are the cornerstones for
lifting people out of poverty,' said Bill Gates, co-chair of the foundation, in
a video shown at the meeting. Citing the IDB's 'foresight,' he said: 'It is
because of your generosity that we will save lives in Islamic countries.'
The Bank is enlisting new partners to replicate what it calls this 'triple win'
financing, hoping to expand the pool of capital available for agriculture,
nutrition, education, energy, infrastructure and climate projects.
Despite the increase in authorized capital and the new offering of sukuk, the
Bank said it intends to maintain a conservative balance sheet.At the annual
meeting, the board of governors called upon its member countries to fulfill
their commitments to invest $5.4 billion in fresh capital in the Bank. The Bank
also announced its intention to tap the sukuk market periodically going
forward.
The Bank's debt-to-equity ratio is expected to gradually climb from its current
ultra-conservative 62% to a still highly conservative 100%. Other major
development banks are much more highly leveraged, carrying debt amounting to
between two and three times equity capital.
The joint lead managers of the new sukuk offering are Barwa Bank, BNP Paribas,
CIMB, HSBC, NCB Capital, and Standard Chartered Bank, and the offering will be
governed by English law.
'This capital increase will allow the bank to finance more and bigger projects
in our member countries,' stated Mr Davlatali Saidov, the chairman of IDB Board
of Governors during the 38th Annual Meeting that approved the capital increase.
'It reflects the confidence of our owners in the Bank's management and in the
potential to make positive contribution to Islamic communities around the
world.'
Muhammad Jameel Yusha'u
00992937359570
myushau(at)isdb.org
News Source: NASDAQ OMX
23.05.2013 Dissemination of a Corporate News, transmitted by DGAP -
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Language: English
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Datum: 23.05.2013 - 02:15 Uhr
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