x Abu Dhabi, UAETuesday 23 January 2018

Al Hilal to keep plans on track

Undeterred by turbulent market conditions, Al Hilal Bank plans new branches and presses ahead with plans for a $1 billion bond issuance.

Al Hilal Bank intends to press on with branch openings and a bond issuance, in spite of trouble on world markets and diminishing opportunities for the banking sector at home.

The Islamic lender is opening a branch in Kazakhstan this week, with three to follow in the UAE by the end of next year, as it makes inroads into markets held by more established banks.

In August, Al Hilal revealed plans for its first sukuk, of an expected size of at least US$1 billion (Dh3.67bn). Despite difficult conditions on credit markets, the bond issuance will go ahead, said Mohammad Berro, the bank's chief executive.

"The issue could probably be launched by year-end, or most probably the beginning of next year," he said.

"There are parts of the current news that are positive. We believe that Al Hilal and Abu Dhabi are an investment opportunity that regionally, and globally, is being sought after."

The euro-zone sovereign-debt crisis roiled global markets, resulting in bond issuances planned by Dolphin Energy and Tourism and Development Investment Company failing to materialise. Majid Al Futtaim Holding shelved a planned bond sale and sought finance from banks instead.

Al Hilal expects to open two branches in Abu Dhabi and one in Dubai before the end of next year.

Smaller lenders, such as Al Hilal, have been able to expand more easily than their larger counterparts, unburdened by the high levels of bad debt among bigger banks amassed as a result of Dubai's financial difficulties.

Al Hilal said it would have a total of 23 branches in operation by the end of this year.

The bank is also opening its third branch in Kazakhstan this week, Mr Berro said, while scouting for further opportunities.

The former Soviet country is seeking to develop its Islamic finance industry and has strong links to the UAE, particularly in the finance and agriculture sectors.

Al Hilal, launched in 2008, is fully owned by the Abu Dhabi Investment Council. The bank made profits of Dh121.1 million in the seven months through July this year.