Friday 22 June 2018

Bank Muscat plans $1.3bn Islamic bond programme

Muscat, March 3, 2014

Bank Muscat, Oman's largest lender, plans to establish a 500 million rial ($1.3 billion) Islamic bond programme this year, and expects to conduct the first sukuk issue by an Omani bank in September, a bank official was quoted as saying.

The bank will seek shareholder approval for its sukuk programme at a meeting on March 19 and regulatory approval thereafter, the Times of Oman quoted Sulaiman Al Harthy, group general manager of Islamic banking, as saying.

Sukuk tranches will be of varying maturities and currencies; some will be issued in international markets, and both public subscriptions and private placements will be used, Harthy told the newspaper. The sukuk will help to avert any mismatches between assets and liabilities at the bank, he added.

Issuance of sukuk is an important ingredient in developing an Islamic banking industry in Oman, the last country in the six-nation Gulf Cooperation Council to accommodate sharia-compliant banking.

Bank Muscat is one of several conventional banks which offer Islamic finance through standalone units; two full-fledged Islamic banks started operations last year, Al Izz Islamic Bank and Bank Nizwa.

Last November, Omani real estate developer Tilal Development Co sold the country's first sukuk, raising 50 million rials through a five-year deal.

The Omani government has been laying plans to sell a sovereign sukuk of its own, and that issue may occur this year, according to comments by some officials.

Al Harthy was also quoted as saying Bank Muscat was seeking permission from shareholders for another sukuk programme worth 1 billion Saudi riyals ($265 million) by its Saudi Arabian branch.

In addition, Bank Muscat will seek permission from shareholders to expand its Euro Medium Term Note programme to $2 billion from $800 million, the newspaper reported. - Reuters

Tags: Oman | sukuk | Bank Muscat |

More Finance & Capital Market Stories

calendarCalendar of Events