ADIB redeems sukuk worth $750m

Abu Dhabi Islamic Bank (ADIB) has successfully completed the planned redemption of its $750m additional tier-one (AT1) perpetual sukuk.

The Islamic bond was issued in September 2018 at a profit rate of 7.13 per cent and was fully redeemed at the trustee call amount, equal to the prevailing face amount of the certificates plus any outstanding payments as of September 20, 2023.

The trading of the certificates on the Irish Stock Exchange was cancelled upon redemption of the certificates.

The redemption of the Islamic bond comes after ADIB raised $750m US dollars denominated AT1 perpetual sukuk.

The Abu Dhabi lender, which is rated A2 by Moody’s and A+ by Fitch Ratings, priced the new perpetual non-call, five-and-a-half-year sukuk at a profit rate of 7.25 per cent per annum payable semi-annually. The recent sukuk are listed and traded on the London Stock Exchange.

The issuance was met with robust demand, attracting interest from over 240 global and regional investors with the final order exceeding $7bn more than 9 times over-subscribed and final pricing 62.5 basis points (bps) tighter than the initial pricing thoughts.

ADIB said by investor category, private banks accounted for 70 per cent, asset and fund managers 16 per cent, commercial banks 10 per cent and others 4 per cent.

The banking group’s tier-one perpetual Sukuk was structured to comply with the internationally agreed Basel III regulatory framework, which includes detailed criteria for capital and liquidity.

ADIB’s growth prospects

Meanwhile, Mubadala Investment Company sold a 7.6 per cent stake in ADIB to Emirates International Investment Company (EIIC), a subsidiary of investment firm National Holding.

EIIC was already ADIB’s top shareholder and the acquisition of a 7.6 per cent stake from Mubadala takes its shareholding to 47 per cent of the Shariah-complaint lender.

The banking group’s first-quarter net profit jumped by more than 54 per cent from a year earlier to $300m (Dhs1.1bn), driven by healthy business growth and higher margins. Its revenues in Q1 2023 rose by 45 per cent to Dhs2bn, compared to Dhs1.4bn in the corresponding period of last year.

“This was driven by 81 per cent growth in funded income to Dhs1.4bn, achieved from the growth in customer financing and higher margins,” the bank said in a bourse filing.

ADIB’s total assets edged up to Dhs172bn in the quarter, up 24 per cent compared to the same period last year, driven by a 19 per cent growth in gross financing and 22 per cent growth in investments. With a market capitalisation of Dhs38.3bn as of September 22, 2023, ADIB has a presence in six global markets including Egypt, Saudi Arabia, the UK, Sudan, Qatar and Iraq.

Read: ADIB’s H1 2023 profit grows by 61% to Dhs2.3bn