Abu Dhabi Islamic Bank (ADIB) Egypt has announced the signing of the first Shariah-compliant subordinated Tier 2 financing agreement worth $50m with the International Finance Corporation (IFC) using the Murabaha system.
The financing agreement will last for five years and is expected to be included in the bank’s Tier 2 of the capital base, with no impact on shareholder rights. This step is part of Abu Dhabi Islamic Bank Egypt’s ongoing strategy to increase its capital base and financial strength, and reflects the global financial institutions’ confidence in the bank’s performance.
Mohamed Aly, CEO and Managing Director of Abu Dhabi Islamic Bank Egypt, stated: “We are pleased to sign with the International Finance Corporation the first Shariah-compliant Murabaha financing agreement. This is considered the first Shariah-compliant financing for the International Finance Corporation, not only in Egypt but also worldwide. It required a lot of work and preparation with the International Finance Corporation to complete the agreement.” He added: “We are always looking for added value for us and the society at large, and we seek to expand the Islamic financing base in Egypt.”
“The International Finance Corporation is a member of the World Bank Group and one of the largest and most important financing entities concerned with promoting sustainable private sector investment. It is expected that the financing provided under this agreement will contribute to enhancing the bank’s future growth plans and will primarily work on providing financing for small- and medium-sized enterprises, thereby supporting local industries in Egypt,” added Aly.
“The financing agreement is expected to help drive the bank’s expansion plan towards adopting more initiatives aimed at supporting sustainable development, by providing a greater number of innovative banking solutions that are Shariah-compliant,” he added.
Cheick-Oumar Sylla, Director for North Africa and Horn of Africa at the International Finance Corporation, commented: “The finance agreement with Abu Dhabi Islamic Bank Egypt reflects our confidence in the bank and its commitment to building a sustainable banking strategy. This agreement is also a testament to the International Finance Corporation’s support for smaller businesses and our focus on driving sustainable development in the region.”
On the other hand, Abu Dhabi Islamic Bank Egypt’s receipt of this financing reflects its full adoption of the sustainability concept within its business strategy. Over the past years, the bank’s vision for sustainable development has been embodied in its success in adopting an integrated set of initiatives and practices that aim to support development at all economic, social, and environmental levels, in line with Egypt’s Vision 2030.
Abu Dhabi Islamic Bank Egypt offers a variety of different financing solutions that meet the diverse needs of individual and corporate customers by providing a range of Shariah-compliant financing options, such as Murabaha, Mudaraba, and Ijara.
