BANK Islam Brunei Darussalam (BIBD) is helping to arrange a benchmark-sized Islamic syndicated loan which it hopes to close later this year for a petrochemical project in the sultanate, a bank official told Reuters in Dubai yesterday.
Currency and tenor are being finalised for the deal, which would be the largest syariah-compliant transaction in Brunei to date, said Javed Ahmad, BIBD’s Managing Director.
Traditionally, benchmark size is understood to mean at least $500 million.
Brunei’s economy relies heavily on oil and gas exports, and the market has already seen five syariah-compliant ship financing transactions since 2001, with sizes ranging between $150 million and $200 million.
The new syndicated loan, however, could open a much wider pipeline of deals in Brunei, which might be denominated in both local and foreign currencies, Javed Ahmad said.
Brunei’s Islamic banks hold a 45 per cent share of total banking deposits in the country. This is expected to reach 50 per cent in the next two to three years, he added.
But in the medium term BIBD, the country’s largest bank, will consider establishing a regional footprint across Asia to enhance its growth prospects, with Malaysia and Indonesia offering the greatest opportunities, Javed Ahmad said. – Reuters