First Gulf Bank's sukuk issue oversubscribed

Abu Dhabi-based First Gulf Bank (FGB) said Wednesday it has issued a five-year, $650 million (Dh2.387 billion) Sukuk to expand its Islamic operations. "Bond subscriptions exceeded $3.8 billion, around six times oversubscribed. [The] five-year Sukuk [is] listed in London at fixed profit rate of 3.797 per cent. Proceeds will be utilised for Islamic general corporate purposes and to grow the bank's Islamic loan book," FGB said in a statement. The FGB Sukuk roadshow started on July 21 and invited fixed income investors from the UAE, Asia and Europe to participate. The book building exercise and the roadshow were closed on July 26. Commenting on the development, Andre Sayegh, FGB's chief executive officer said : "As our focus is on providing sustainable returns to our shareholders through maintaining strong business fundamentals, the Sukuk will diversify our sources and maturities of funding, and expand our Islamic operations. Article continues below We have received a massive endorsement from global investors and this will give us a firmer foothold for the future. The overwhelming response we have received, clearly demonstrates the confidence that global investors have in the UAE economy in general and in FGB as a bank in particular." FGB posted a net profit of Dh890 million in the fiscal second quarter this year, a 13 per cent increase on the year. "Increasing the Islamic financing portfolio would enable FGB to increase their overall loan book. As their Islamic financing portfolio increases, it would allow them to increase their market share in Islamic banking," Shabbir Malek, a banking analyst at EFG-Hermes told Gulf News. FGB's shares on the Abu Dhabi Securities Exchange closed yesterday 0.59 per cent lower at Dh16.90.