Sharjah Islamic Bank (SIB) has successfully completed the issuance of Dh266.8 million worth of sukuk convertible into equity of the bank to the Sharjah Social Security Fund (SSSF). The move came in line with the Year of Giving (2017).
The announcement was made by Abdul Rahman Al Owais, chairman of the board of directors of SIB, who stressed that the Ruler of Sharjah had considered SIB as a safe investment for the SSSF, which would utilise the income generated from the bank's dividends for uplifting social activities in the emirate.
Al Owais noted that in March 2017, at SIB's AGM, shareholders had approved the issuance of sukuk convertible into 10 per cent of the ordinary share capital by the bank. As per the scheme, the Ruler of Sharjah nominated an entity engaged in endowment activities to subscribe to sukuk equal to 10 per cent of SIB's capital and converting it into equity for the bank at a nominal value of Dh1 each per share which will be non-tradable.
The bank sought approvals from the Securities & Commodities Authority and the Central Bank of UAE for this scheme, which were successfully sanctioned.
Al Owais said: "The mark of confidence is also a win-win situation for SIB, whose shared capital has increased, which is the strongest level of capital for any financial institution. We expect that our capitalisation ratios, will be strengthened by around 100 bps with the issuance of this capital."
Al Owais added that by virtue of this exercise, SIB's shared capital has increased from Dh2,668,050,000 to Dh2,934,855,000, and the SSSF now owns 9.09 per cent of the share capital
He concluded: "This is part of the bank's excellence strategy in supporting the community through different CSR initiatives. The bank has since its inception been an integral part of the community."