The Sharjah Islamic Bank (SIB) has successfully completed the issuance of AED266.8 million worth of Sukuk convertible into equity of the bank to the Sharjah Social Security Fund (SSSF). The move came in line with the Year of Giving (2017) under the patronage and the wise vision of H.H. Dr. Sheikh Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah.

The announcement was made by Abdul Rahman Al Owais, Chairman of the Board of Directors of SIB, who stressed that the bank was proud of its management and that H.H. the Ruler of Sharjah considers SIB as a safe investment for the SSSF, which in turn will utilise the income generated from our bank’s dividends for uplifting social activities in the emirate.

Al Owais noted that earlier this year in March, at SIB’s AGM, the shareholders approved the issuance of Sukuk convertible into 10 percent of the ordinary share capital by the bank. As per the scheme, H.H. the Ruler of Sharjah nominated an entity engaged in endowment activities to subscribe to Sukuk equal to 10 percent of SIB’s capital and converting it into equity for the bank at a nominal value of AED1 each per share which will be non-tradable. The bank sought approvals from the Securities and Commodities Authority (SCA) and the Central Bank of UAE for this scheme, which were successfully sanctioned.

"The mark of confidence is also a win-win situation for SIB, whose shared capital has increased, which is the strongest level of capital for any financial institution. We expect that our capitalisation ratios, will be strengthened by around 100 bps with the issuance of this capital."

Al Owais added that by virtue of this exercise, SIB’s shared capital has increased from AED2,668,050,000 to AED 2,934,855,000, and the SSSF now owns 9.09 percent of the share capital.

"This one-of-a-kind move is part of the bank’s excellence strategy in supporting the community through different CSR initiatives. The bank has since its inception been an integral part of the community. The Board of Directors is committed to embracing the noble values inspired by the vision of H.H. the Ruler of Sharjah, who spares no efforts to ensure the development of our society, citizens and nation."