Al Hilal Bank, the Islamic lender owned by the Abu Dhabi Investment Council (Adic), plans to sell a US$500 million sukuk by the end of the year as the first tranche of a $2.5 billion bond programme.
The Islamic bond is expected to be used for general business purposes such as liquidity management and to open a small number of new branches across the UAE. There are no plans for international expansion.
The sale was announced at the company's new Abu Dhabi headquarters in the Al Bahr Tower yesterday, just a day after the bank was assigned its first credit rating by agencies Moody's and Fitch.
Moody's gave Al Hilal an A1 rating while Fitch awarded A-plus.
Moody's noted Al Hilal has a stable outlook, citing the bank's robust franchise growth, the strength of its asset base, its advanced technology infrastructure and strong UAE government support.
Fitch noted improving profitability, healthy asset quality, robust reserve coverage, satisfactory capitalisation as well as government support as key factors in the rating decision.
"The ratings mark a significant milestone in Al Hilal Bank's history and stands as testimony to the bank's philosophy of responsible growth," said the chief executive Mohamed Jamil Berro.
"The outcome emphasises the bank's stance towards robust risk management, continuous infrastructure enhancement as well as relentless focus on innovation and excellence," he added.
Fitch also noted that, as a relatively young institution, Al Hilal had managed to avoid many of the legacy liquidity and credit issues that had badly affected many of the other banks across the UAE, and indeed the rest of the world.
The bank, which is only five years old, applied for the credit rating just six months ago as a first step towards launching its first Islamic bond.
Mr Berro said the company might open a few branches in the UAE over the next five years but is more focused on technological expansion such as mobile banking.
"We will focus on the UAE market for growth," he said."Mobile banking and technology is very important to us.
"We want our customers to be able to access their banking services anywhere."
Al Hilal is one of the fastest- growing banks in the UAE, with total revenues of Dh1.8bn and a net profit of Dh310m last year. Mr Berro forecast profits of Dh40m for the 2013 financial year and said loan book growth was about 7 per cent in the first half of the year, a rate of growth he expected to be maintained by the year's end.
The bank also revealed assets had grown from Dh32.1bn at the end of last year to Dh34.2bn in the first six months of this year, representing growth of 6.6 per cent.
Deposits showed 6.9 per cent growth in the first six months of the year, improving from Dh24.9bn to Dh26.6bn.
Net profits for the first six months of this year were Dh217.4m.
Al Hilal has 24 branches across the UAE and a presence in Kazahkstan. It has attracted about 40,000 customers.