United Arab Bank signs US$100 million Murabaha syndication deal

United Arab Bank (UAB), the fastest growing bank in the Middle East, has announced the completion of a 3-year syndicated Murabaha facility worth US$100m with four banks based in the UAE, Bahrain, and Kuwait. The Murabaha deal is the first Islamic syndication completed by UAB. 

Al Hilal Bank, headquartered in the UAE, served as the Mandated Lead Arranger and Bookrunner for the deal, while the Arab Banking Corporation, headquartered in Bahrain and Sharjah Islamic Bank, were the other Mandated Lead Arrangers. The National Bank of Kuwait also served as a Lead Arranger. 

The syndicated Murabaha facility which has been taken out for general corporate purposes, was almost twice oversubscribed. The appetite of banks across the region to participate in this club deal underlines UAB’s exceptional recent financial performance. The bank sustained the pace of a record-breaking 35 per cent surge in net profits over the course of 2013 with a 34 per cent year-on-year profit rise in the first quarter of 2014. 

This syndicated facility is the second for UAB in a matter of months. At the end of last year, the bank signed a US$250m 2-year loan facility with a syndicate of 12 multinational and regional banks. This, too, was heavily oversubscribed, receiving more than double the subscriptions above its original US$200m target. 

Paul Trowbridge, Chief Executive Officer of United Arab Bank, said: “I am very pleased to announce the completion of this syndicated Murabaha deal, which is further evidence of UAB’s burgeoning reputation throughout the Middle East. Our evolution from a relatively small financial institution in Sharjah to the fastest growing bank in the Middle East, offering a diverse range of services to loyal customers all across the UAE, is testament to our strong and sustainable growth path and excellent market profile – the reason why banks from across the region have confidence in us, and were eager to participate in this Murabaha facility.” 

Mohammed Jamil Berro, Group CEO, Al Hilal Bank added: “Our major role as Mandated Lead Arranger and Bookrunner for the syndicated Murabaha for United Arab Bank reflects our exceptional ability to both engage in and handle such major transactions. It also signifies our intention to closely work with other members of our industry to our mutual benefit and, ultimately, to the advantage of our customers and stakeholders. This new long-term agreement will definitely take the already productive collaboration between Al Hilal Bank and United Arab Bank to the next level.” 

UAB’s reputation was bolstered this month after it was named the fastest growing bank in both the Middle East and the UAE at the Banker Middle East Industry Awards for 2014. The bank expects to have 35 branches in place across the country by the end of the year. This adds to the accolades UAB won in March at the parallel Banker Middle East UAE Products Awards: 'Best Loyalty Program’ for its ‘UAB Rewards’ scheme - for the second consecutive year - and 'Best Premium Card” for UAB Visa Infinite card.