MALAYSIA:
Public Islamic Bank (PIBB), a wholly-owned subsidiary of Public Bank
(PBB), has obtained approval from Bank Negara Malaysia and the Securities
Commission of Malaysia for the establishment of a Basel III-compliant
30-year Sukuk program worth RM5 billion (US$1.53 billion). The bank joins
the likes of Maybank Islamic, RHB Islamic and AmIslamic in issuing Sukuk
in compliance with Basel III standards.
According to a filing on Bursa Malaysia, PIBB will set up an Islamic
medium-term notes program under the principle of Murabahah (via a
Tawarruq arrangement) to facilitate the issuance of a senior and/or a
subordinated Sukuk Murabahah. The papers, to be issued from time to time
under the Sukuk Murabahah Program, will qualify as Tier 2 capital for the
computation of the regulatory capital of PIBB and Public Bank Group in
accordance with the Capital Adequacy Framework (Capital Components) for
Islamic Banks issued by the central bank.
RAM Ratings has assigned respective ‘AAA/Stable’ and ‘AA1/Stable’ ratings
to the senior Sukuk and subordinated Sukuk to be issued under PIBB’s
proposed Sukuk Murabahah program. Concurrently, the ratings agency has
also reaffirmed PIBB’s financial institution ratings at ‘AAA/Stable/P1’.
According to an emailed statement to Islamic Finance news, the financial
institution ratings reflect PIB’s strategic importance as the Islamic
banking arm of its parent, PBB Group, rated ‘AAA/Stable/P1’ by RAM.
PIBB’s operations are highly integrated with those of its parent,
leveraging on PBB’s risk-management systems, branch network, back-room
operations and IT infrastructure. RAM believes that the group will
readily extend support to PIBB in an event it is needed. For the
financial year ending December 2013, PIBB reported a 12.9% decline in its
pre-tax profits to RM473.2 million (US$144.77 million) with a
common-equity Tier 1 capital ratio of 11.7%.
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