IslamicFinance.de

Bank Islam Brunei Darussalam aims to raise as much as $500 million in an initial public offering (IPO) and the bank will be listed on the Malaysian bourse. JPMorgan and Malayan Banking (Maybank) are set to be joint global coordinators for the initial public offering of $200 million-$500 million this year. The IPO is expected to raise around $300 million but the final amount will depend on the size of the greenshoe option. Brunei is one of the world's richest countries on a per capital basis. The country does not have a stock exchange although its central bank last year announced draft rules to form one.

Bank Islam Brunei Darussalam has picked Malaysia as the destination for a planned initial public offering (IPO) that could raise as much as US$500mil. The IPO would be the first from a company based in Brunei, an oil-rich country without its own stock exchange. First-time share sales in Malaysia raised US$833mil so far this year, up from US$235mil during the same period last year. Shareholders of Bank Islam include the Brunei finance ministry, the Sultan Haji Hassanal Bolkiah Foundation, private equity firm Fajr Capital and about 6,000 Bruneian investors. The lender had 7.5 billion Brunei dollars (US$5.4bil) of total group assets at the end of 2015. Its Tier 1 capital adequacy ratio was 23.3%.

According to a report from the Oxford Business Group Brunei's financial system is in transition to one in which Islamic banking and takaful are the dominant forms of banking and insurance. The publication of the Report says that in 2014, Brunei two Islamic banks, Perbadanan Tabung Amanah Islam Brunei and Bank Islam Brunei Darussalam had a total combined assets of $7.9 billion at the end of 2013. Takaful is also dominant in the general insurance sector with a 68 per cent share of the general insurance and takaful assets. Insurance Islam TAIB and Takaful Brunei compete in Brunei’s insurance market.

Bank Islam Brunei Darussalam (BIBD) is helping to arrange a benchmark-sized Islamic syndicated loan which it hopes to close later this year for a petrochemical project in the oil-rich sultanate. Currency and tenor are being finalised for the deal, said Javed Ahmad, BIBD's managing director. The new syndicated loan could open a much wider pipeline of deals in Brunei, which might be denominated in both local and foreign currencies, Ahmad said. Besides, in the medium term BIBD will consider establishing a regional footprint across Asia to enhance its growth prospects, with Malaysia and Indonesia offering the greatest opportunities, Ahmad said.

Brunei Darussalam’s only Islamic bank hopes oil industry investment will help stoke a sukuk market now dominated by government issuance of short-term Shariah-compliant bills. Bank Islam Brunei Darussalam is seeking to arrange as much as B$2 billion ($1.6 billion) of corporate debt in the next 12 months as companies seek to fund projects aimed at boosting crude oil output. Islamic banking assets total about $6.8 billion in the Southeast Asian sultanate, which funds investment largely with its oil wealth. Bank Islam currently supplies Shariah-compliant loans and a global corporate sukuk it was underwriting two years ago never came to fruition.While Brunei’s corporate sukuk has been in a lull, the formation of a central bank is a positive development for the market.