Bank Islam issues Seventh Tranche of Sukuk Murabahah
Bank Islam Malaysia Berhad (Bank Islam) successfully issued the seventh tranche of RM250 million (approx. $53 million) under its RM10 billion (approx. $2.1 billion) Sukuk Murabahah Programme. This issuance is particularly significant as it qualifies as Tier 2 regulatory capital, aligning with Bank Negara Malaysia’s Capital Adequacy Framework for Islamic Banks. By strengthening its capital adequacy ratio, Bank Islam ensures compliance with Basel III requirements, which emphasise financial resilience and risk management in the banking sector.
The newly issued Sukuk Murabahah is structured to be redeemed at full nominal value upon maturity, reinforcing investor confidence in its stability. Additionally, the instrument includes a call option on its fifth anniversary, granting Bank Islam the flexibility to redeem the Sukuk early if deemed financially advantageous. This feature aligns with the dynamic capital management strategies of Islamic financial institutions, allowing them to optimise their capital base while ensuring compliance with regulatory requirements.
The Sukuk Murabahah has been rated A1/stable by RAM Rating Services Berhad, which underscores its strong credit quality and low investment risk. The stable outlook signals investor confidence in Bank Islam’s financial health, governance, and business fundamentals. In the broader Sukuk market, an A1 rating positions the issuance as a moderate-risk yet attractive instrument, making it appealing to institutional investors seeking Sharia-compliant fixed-income investments.
This issuance aligns with the bank’s long-term strategy of expanding its Islamic capital market presence while reinforcing its capital base to support business growth. The injection of Tier 2 capital will enhance Bank Islam’s ability to manage risk, fund new business opportunities, and meet regulatory benchmarks for capital adequacy.
The successful issuance of this Sukuk Murabahah reflects a strong demand for Sharia-compliant financial instruments, a growing trend in Malaysia’s Islamic finance sector. With Malaysia being a global leader in Sukuk issuance, Bank Islam’s continued reliance on Sukuk Murabahah shows the market’s preference for structured, asset-backed Islamic financial solutions. This issuance also contributes to the development of Malaysia’s Islamic debt capital market, reinforcing the country’s position as a hub for Sukuk financing.
Meanwhile, in another development, Bank Islam Malaysia Berhad (Bank Islam) has entered into a strategic joint venture with Syarikat Takaful Malaysia Keluarga Berhad (Takaful Malaysia) to enhance its bancatakaful offerings, providing customers with comprehensive and accessible Shariah-compliant financial protection.
The partnership enables Bank Islam customers to access a range of takaful products across all Bank Islam branches nationwide. This initiative aligns with the bank’s commitment to offering innovative Islamic financial solutions that enhance financial security and protection for its customers.
This partnership signifies a major step forward in strengthening Malaysia’s Islamic financial ecosystem, ensuring that takaful solutions remain a key pillar in Shariah-compliant financial planning.