Bank Muamalat to expand branch network

Will sell sukuk Islamic bonds to finance expansion.

Bank Muamalat Indonesia plans to sell US$$73 million worth of sukuk Islamic bonds in the first half of 2013. The bond sale is part of BNI’s plan to issue a total of US$156 million in sukuk in the next few years, In 2011, BMI issued US$83 million in sukuk at 10.21% yield.

BMI was the first commercial bank in Indonesia to implement Islamic Sharia principles in its daily operations. Shariah bonds comply with the Islamic teaching that bans interest, instead using asset returns to pay back investors.

BMI has about 500 branch offices and outlets across Indonesia.

BMI is 32.7% controlled by the Islamic Development Bank; 19.3% is held by Kuwait’s Boubyan Bank; 17.9% by by Atwill Holdings; 6% by the National Bank of Kuwait and the rest by one of several smaller shareholders.

There are 11 Shariah-compliant lenders in Indonesia, including Bank Syariah Mandiri and Bank Mega Syariah.