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Kuveyt Turk gets nod for TRY2 billion sukuk, closes Dubai unit

February 27, 2017 11:07 am

People walk past the Kuveyt Turk head office in Istanbul February 21, 2012. REUTERS/Murad Sezer

Turkish participation bank Kuveyt Turk has received regulatory approval to raise 2 billion lira ($555.8 million) via Islamic bonds, or sukuk, as it expands its domestic footprint while winding-down its Dubai unit.

The sukuk would add to the bank’s previous taps of Turkey’s domestic market, after it raised a combined 650 million lira via public and subordinated sukuk in 2016. It also raised $500 million via dollar-denominated sukuk in October.

Kuveyt Turk, 62 percent owned by Kuwait Finance House , would sell the lira-denominated sukuk to qualified investors through its asset-leasing company, KT Kira Sertifikalari Varlik Kiralama, according to a regulatory filing.

No timeframe or tenor were given for a potential deal from the latest sukuk programme.

New funding could help the bank’s plans to expand its branch network to 400 offices this year from a current 385, after it increased its net profit by 22 percent and total assets by 15 percent in 2016.

In December, however, the bank said it would terminate all activities of its wholly-owned subsidiary in Dubai, which it setup in 2009, as it had not established a commercial advantage.

It will continue to service the Gulf region via its branch in Bahrain, while concentrating on its operations in Turkey and Germany, where it opened in 2015.

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