Malaysia's Public Bank seeks approval for $1.5 bln Basel III sukuk-IFR
KUALA LUMPUR Feb 26 (Reuters) - The sharia compliant arm of Public Bank Bhd, Malaysia's third largest lender, has submitted a proposal to the central bank for a 5 billion ringgit ($1.5 billion) Basel-III compliant Islamic bond program, IFR reported.
Banks around the world face larger capital requirements under Basel III standards that are being phased in over several years. Part of the change is banks issuing new types of bonds that can be written down or converted into equity in times of stress.
Malaysia's Islamic banks have been slow to do this, partly because they are not currently in urgent need of additional capital, bankers say.
Public Islamic Bank, a wholly-owned unit of Public Bank, may emerge as the third issuer of Basel III compliant sukuk. AmIslamic, which established a Basel III compliant sukuk program for 3 billion ringgit on Feb 13, sold 200 million ringgit on Wednesday, a filing to the central bank showed.
RHB Capital received approval from the securities commission for a similar 1 billion ringgit program earlier this month .
The country's conventional banks have begun issuing Basel III bonds; Public Bank issued medium-term notes worth 1 billion Malaysian ringgit last September. ($1 = 3.2815 Malaysian ringgit) (Reporting By Al-Zaquan Amer Hamzah; Editing by Toby Chopra)