Another successful SME Bank sukuk issuance

SME Bank group president and chief executive officer Datuk Aria Putera Ismail

ON the back of the current challenging environment, Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) has successfully recorded another sustainability sukuk issuance under its book-building exercise, registering a total order of RM536mil which exceeded the initial desired size of RM300mil.

Group president and chief executive officer Datuk Aria Putera Ismail in a statement said: “Amidst the challenging market and profit rate hike situation, SME Bank’s sustainability sukuk is successfully priced at a competitive profit rate of 4.04%.

“The bank’s sustainability sukuk had received good demand from local financing institutions, fund management and insurance companies, as well as government-linked investment companies.

“This signified a high level of confidence from the investment community on SME Bank’s ability to deliver its mandate of nurturing and developing the SMEs.”

Mohd Nazri Abu Samah, who is the bank’s head of treasury, said the proceeds from this issuance will only be utilised to finance environment, social governance (ESG)-related projects.

In addition, he said SME Bank will be able to offer more innovative financing solutions for small and medium enterprises.

This non-government guarantee sukuk wakalah programme for the bank has been accorded an AAA rating by MARC Ratings Bhd and also gold standard, its highest rating for the rating agency’s sustainability sukuk framework.

SME Bank is currently embarking on a wholesome and comprehensive journey in adopting ESG in its operations.

It is now in its second year of implementing the three-year sustainability roadmap where the focus is on institutionalising the ESG culture across the bank, creating maximum ESG awareness with the customers and establishing SME Bank’s own comprehensive and customised sustainable development goal (SDG) framework.

Development of the SDG framework involves several key milestones such as the materiality assessments amongst the bank’s stakeholders, identifying the gaps and aligning the bank’s strategies with the ESG goals.