KUALA LUMPUR (Nov 12): Bank Islam Malaysia Bhd said on Friday (Nov 12, 2021) it has issued the fourth tranche of subordinated sukuk murabahah or Islamic bond amounting to RM300 million to enhance the group's capital adequacy under the financial services provider's sukuk murabahah programme, which was lodged with the Securities Commission Malaysia on Sept 6, 2018.

In a statement on Friday, Bank Islam said the 10-year RM300 million sukuk, which was issued on Friday (Nov 12, 2021), will mature on Nov 12, 2031. Bank Islam however did not specify the RM300 million sukuk's annual profit rate.

"The subordinated sukuk murabahah issued under the sukuk murabahah programme shall qualify as Tier 2 regulatory capital of Bank Islam in compliance with Bank Negara Malaysia's Capital Adequacy Framework for Islamic Banks (Capital Components).

"Hence, it will enhance the capital adequacy of the bank (Bank Islam) in line with the Basel III requirements," Bank Islam said.

According to online reports, Basel III is an international voluntary regulatory framework to strengthen financial services providers' capital through higher minimum capital requirements, ownership of high-quality liquid assets, lower leverage or debt.

In Bank Islam's Bursa filing, Bank Islam said that under the sukuk murabahah programme, Bank Islam is given the flexibility to issue subordinated sukuk murabahah and senior sukuk murabahah during the availability period of the sukuk murabahah programme.

"RAM Rating Services Bhd has assigned a final long-term rating of 'A1/stable' and 'AA3/stable' to the subordinated sukuk murabahah and senior sukuk murabahah respectively under the sukuk murabahah programme.

"Bank Islam is also the principal adviser, lead arranger, lead manager and Shariah adviser for the sukuk murabahah programme," Bank Islam said.

At 5pm on Friday, Bank Islam's share price closed up two sen or 0.7% at RM2.89, giving the bank a market capitalisation of about RM6.01 billion.

Bank Islam has 2.08 billion shares.