The Bank Rakyat’s Sukuk Wakalah programme with a nominal value of RM10 billion can reduce the bank’s dependency on corporate depositors while increasing the regulatory ratio for the banking business’ needs.

Bank Rakyat chief executive officer, Datuk Rosman Mohamed said the Sukuk programme would also enable the bank to obtain long term funding with a fixed rate in addition to diversifying the long term funding composition.

“As you all know, Sukuk is a long term fund, the whole idea is to stabilise the funding situation, part of the liquidity management, this is the bank's planning to ensure we have good funding portfolio,” he told the media after the signing of the agreement for the Bank Rakyat Sukuk Wakalah programme here today.

The 30-year programme would be implemented through a special purpose company, Imtiaz Sukuk II Bhd; the first issue of the sukuk is expected to begin soon with a size of RM500 million and an option to increase it.

“This Sukuk programme is offered for between three and five years,” Rosman said.

He represented Bank Rakyat in signing the agreement with a number of financial institutions including principal adviser and lead arranger Maybank Investment Bhd, which was represented by its CEO, Fad'l Mohamed.

For the first issue, Bank Muamalat Malaysia Bhd, CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd were appointed as Joint Lead Managers, each represented by their respective CEO, Khairul Kamarudin, Jefferi M. Hashim, Fad'l, and Robert Huray.

Entrepreneur Development and Cooperatives Minister Datuk Seri Wan Junaidi Tuanku Jaafar was present to witness the formality.

The programme is structured on the Shariah principle of Wakalah Bi Al-Istithmar approved by the Securities Commission Malaysia and given an AA2(s) rating by RAM Rating Bhd.

Rosman said Bank Rakyat is on a solid footing and has no cash flow problems.

“The issuance is a choice as it is based on balance sheet growth. This is all about managing stability; I want to emphasise here that Bank Rakyat does not have any liquidity problems,” he said.

Meanwhile, Wan Junaidi in his speech said the Wakalah Sukuk programme reflects Bank Rakyat's proactivity in capital management, especially in the current challenging economic environment.

He said the Sukuk market as a significant source of financing for large-scale investment projects plays an important role in facilitating the economic development process.

“Sukuk has contributed 70 per cent of the issuance of corporate bonds in the country since 2017. For market investors, Sukuk can provide greater potential to diversify their investments. Thus, the development of Sukuk is very important as an alternative for the development of an economy,” he said.

-- BERNAMA