Dubai’s largest Sharia-compliant lender approves sukuk programme

The board of the biggest Sharia-compliant lender in the emirate have approved a multibillion-dollar sukuk programme to enable it to raise funds if needed.

Dubai Islamic Bank, the biggest Sharia-compliant lender in the emirate, said that its board of directors have approved a US$5 billion sukuk programme for the lender that will allow it to raise funds if needed at a time when the economy is slowing and liquidity is tight amid low oil prices.

The board can issue any or other similar instruments such as sukuk at a time of its pleasing, the bank said in a statement to the Dubai Financial Market.

It also approved a dividend distribution of 45 fils per share amounting to a distribution to shareholders of more than Dh2.2bn.

This month, the bank listed a $1bn sukuk on the Nasdaq exchange in Dubai, bringing its total issuances on that exchange to $4.25bn.

Governments, companies and banks headed to the bond and sukuk market at record pace last year in the Arabian Gulf, raising more than $60bn to finance a shortfall in deficits as well as to meet gaps in capital expenditure and money needed to lend to ­customers.

The huge drop in oil that began in the summer of 2014 has taken its total on the ability of banks to lend to customers because many of the governments in the region yanked deposits in those lenders to plug deficits.

Follow The National's Business section on Twitter