BankIslami approves Rs5 billion Shariah-compliant Sukuk issuance

BankIslami Pakistan Limited has approved the issuance of a Shariah-compliant Sukuk of up to Rs5 billion as a Tier 2 capital instrument under Basel III guidelines, according to a disclosure submitted to the Pakistan Stock Exchange (PSX) under Sections 96 and 131 of the Securities Act, 2015.

The board approved the privately placed and over-the-counter listed Sukuk to strengthen the bank’s regulatory capital position and support growth in its banking operations, subject to obtaining all required corporate and regulatory approvals.

"With a view to strengthen the regulatory capital position and support the growth of the banking operations of BankIslami Pakistan Limited, the Board of Directors of the Bank has accorded its approval for the Bank to issue a privately placed and over the counter listed Shariah compliant Sukuk for an amount up to PKR 5,000,000,000/- (Pak Rupees Five Billion only) as a Tier 2 capital instrument under the Basel III guidelines issued by the State Bank of Pakistan, subject to obtaining of all applicable corporate and regulatory approvals and completion of necessary formalities," read the bank's notice sent to the PSX.

The bank will also seek shareholder approval for the issuance of ordinary shares other than through rights, in case the Sukuk is converted upon the occurrence of a conversion event in accordance with its terms and subject to directions of the State Bank of Pakistan.