DUBAI, Oct 29 (Reuters) - 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 oil-rich sultanate, a bank official told Reuters on Wednesday.
Currency and tenor are being finalised for the deal, which would be the largest sharia-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 sharia-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, Ahmad said.
Brunei’s Islamic banks hold a 45 percent share of total banking deposits in the former British protectorate of about 400,000 people. This is expected to reach 50 percent 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, Ahmad said.
BIBD shareholders include Brunei’s government, the Sultan of Brunei’s charitable foundation and Dubai-based private equity firm Fajr Capital. (Editing by Andrew Torchia)