| |
Meezan Bank and Citibank will jointly issue rupees two billion Sukuk bonds for the Pakistan International Airlines (PIA) as part of national airline's restructuring and modernisation programme.
Talking to Business Recorder, President and Chief Executive Officer (CEO) of Meezan Bank Irfan Siddiqui said that Sukuk bonds would be issued next month in collaboration with CitiBank for a period of three years with the two banks contributing Rs 1 billion each. "The federal government has already accorded its guarantee to this deal," he said.
According to him, PIA will return to the two banks six-month KIBOR plus minimum margin. He said that since PIA wanted to decrease its debts, it had, therefore, decided to convert the short-term loan into long-term one to strength its financial position.
He said that Islamic-banking share was rapidly growing and expected to reach 10 percent of the banking industry during the next five years. Islamic banking was initiated in Pakistan five years ago and during this period, it had got three percent shares in the banking sector, while seven percent further growth was expected during next five years, Siddiqui said.
"Presently, over 170 branches of Islamic banking are operating across the country, increasing from 17 branches in December 2003," he added. He said the central bank had adopted best Islamic banking policies and all stakeholders were satisfied with them.
"To bring harmonisation and standardisation in the practices and procedures followed by the Islamic banks, including Meezan bank, necessary steps of Shariah standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI)" are being taken, Siddiqui added. He said that AAOIFI was a Bahrain-based institution and its ruling was being exercised all over the world for procedures and practices of Islamic banking.
The Meezan Bank President said that Islamic banking deposits were also rapidly increasing, which had been increased by 11 percent to Rs 93,068 million at the end of March 2007 from Rs 83,742 million at the end December 2006.
Recently, the government had decided to procure Islamic mode of financing for public sector institutions, aimed at boosting the Islamic banking in the country, he said.
"This step of the central banks will help the Islamic banks to utilise their funds in a broader way," he added. The Government had provided a level playing filed to the Islamic banks as well as conventional banks and now it was up to the people which type of banking system they preferred to opt for, he said. He added that Islamic banks had all type of financing instruments to facilitate their customers.
"Meezan Bank has 45 percent shares in the overall Islamic banking in the country and has earned Rs 190 million after profit in the first quarter of the current calendar year 2007," Siddiqui said.
He said that Meezan Bank share also had shown tremendous growth and it had grown by 67 percent during the first half (January-June) of the 2007 calendar year from Rs 19.75 per share to Rs 33 per share. "Meezan Bank is the fastest growing bank of the country and it has paid 11 percent profit on seven-year deposits" he added.
The bank had earned a profit of Rs 780 million pre-tax and a Rs 600 million after tax profit during the 2006 calendar year, while its deposits had swelled by 1.5 percent during the first quarter. He said that some Rs 30 billion had been provided for long-term investments during the last five years and some of the new financing projects would be completed soon.
Meezan Bank had invested 65 percent in the corporate sector, 15 percent in small and medium enterprises (SME), 10 percent in car loan and remaining 10 percent in house finance.
Siddiqui said that Meezan Bank was providing 100 percent Islamic-banking facilities to its customers and a Shariah board had been established to ensure all requirements of Shariah-based banking. The assets quality ratios reflected that the quality of financing had improved as the non-performing loans (NPLs) stood at 1-2 percent of the total financing.
He said that Meezan Bank services would reach 30 cities of the country from 21 branches, while its branches network would be extended to 95 at the end of December. Presently, its figure was 71, he added. Mr Zubyr Soomro, country head, Citibank, could not be reached for his comments ( Courtesy by Business Recorder )
|
