Image Source: https://www.nst.com.my/business/2023/05/914928/sme-banks-green-sukuk-far-exceeds-rm500mil-subscription-target-rm1bil

SME Bank, a development financial institution in Malaysia, has achieved remarkable success with its recent issuance of a sustainability sukuk. The bank announced that the total order for the Sukuk issuance exceeded RM1.0 billion, far surpassing the initial targeted size of RM500 million. This overwhelming response from investors reflects their confidence in SME Bank’s ability to drive the growth of small and medium enterprises (SMEs) while promoting sustainable practices.

The Sukuk issuance, conducted under a book-building exercise, aims to finance projects that are aligned with environmental, social, and governance (ESG) considerations. By focusing on ESG projects, SME Bank not only contributes to sustainable development but also positions itself as a provider of innovative financing solutions tailored to the unique needs of SMEs. This strategic direction aligns with the bank’s commitment to supporting SMEs and fostering their long-term sustainability.

Leading financial institutions, including RHB Investment Bank Bhd, AmInvestment Bank Bhd, CIMB Investment Bank Bhd, and Maybank Investment Bank Bhd, were involved in the successful Sukuk issuance. The demand for the sukuk was driven by local and foreign financial institutions, fund management companies, takaful and insurance firms, and government-linked investment companies. The strong response underscores the confidence of investors and the wider financial community in SME Bank’s ability to drive SMEs’ growth and ensure their sustainability.

Group President and CEO of SME Bank, Datuk Wira Dr. Aria Putera Ismail, expressed his satisfaction with the overwhelming demand and investor confidence, which prompted the bank to increase the total issuance amount to RM1.0 billion. Despite the challenging market environment, the sustainability sukuk was priced competitively with a profit rate of 4.05%. This demonstrates the bank’s commitment to providing attractive investment opportunities while maintaining its financial stability.

With its successful sukuk issuance, SME Bank has demonstrated its commitment to driving sustainable development and supporting SMEs. The strong demand from investors reflects the confidence in the bank’s ability to deliver on its mission. As SME Bank continues to prioritize ESG projects and offer tailored financing solutions, it reinforces its position as a key player in fostering the growth and sustainability of SMEs in Malaysia. As a development financial institution wholly owned by the Ministry of Finance and regulated by Bank Negara Malaysia, SME Bank plays a vital role in the development of SMEs in Malaysia.

Read Further Here: https://www.nst.com.my/business/2023/05/914928/sme-banks-green-sukuk-far-exceeds-rm500mil-subscription-target-rm1bil