Kenyan Islamic bank to launch sukuk in Q2

Thu Mar 8, 2012 6:10am GMT
 

By Duncan Miriri

NAIROBI (Reuters) - Kenya's pioneering Islamic lender First Community Bank is planning to launch an Islamic bond or Sukuk in the second quarter of this year through its newly-formed investment bank, the bank's managing director said.

Islamic banks have grown in the Kenyan banking sector since being the first country in eastern and central Africa to allow Islamic banking in 2007, catering to customers who want to follow Islamic rules by avoiding direct payment or earning of interest - viewed as usury under Islamic law.

Nathif Adam, who left his post at the head of the bank to run the investment bank, FCB Capital, said the sukuk was one of several opportunities that the new outfit will pursue.

FCB has already participated in a 1 billion shilling sukuk issue (sharia-compliant bond) from the government. The Kenyan sukuk issue was split between FCB and Gulf African.

The sukuk issue was a tranche of the government's first infrastructure bond that raised a total 18.5 billion shillings in February 2009.

Adam said his bank's sukuk would be the first independent one issued in east Africa's biggest economy.

"This is the first independent sukuk proposition. The other (infrastructure bond) was structured to just allow us to participate, and as such we cannot call it a sukuk," he said.

"Initially we are looking at a sukuk of 2 billion shillings," Adam told Reuters late on Tuesday.   Continued...

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