Turkish Islamic lender Turkiye Finans has received regulatory approval to raise 71 million lira ($31.5 million) via sukuk, or Islamic bonds, according to Turkey’s Capital Markets Board.
The sukuk will be issued through TF Varlik Kiralama, a wholly-owned unit of Turkiye Finans, which last year set up a 100 million lira sukuk issuance programme. No time frame was given for the deal.
The bank, majority owned by Saudi Arabia’s National Commercial Bank, is one of four Islamic banks in the country, with a sole focus on loans to corporate clients.
Sukuk are increasingly being used by Islamic banks as the industry expands, helping diversify funding sources away from syndicated loans. As of September, Turkiye Finans saw assets grow by 35.4 percent from a year earlier.
The bank also plans to issue by year end $50 million worth of ringgit-denominated sukuk in Malaysia, a market which it first tapped in July.
Separately, three Turkish state-run banks plan to launch their own Islamic units, moves which are expected to increase competition in the sector and raise operating costs for incumbents. ($1 = 2.2216 Turkish lira)
Originally published on www.reuters.com