UAE-based main shareholders of Bank of Khartoum more than triple capital to $225m
Bank of Khartoum, Sudan's oldest bank, wants to boost its agricultural finance business with the help of Gulf Arab banks after winning the African country's first-ever international rating, its head said on Thursday.
Undeterred by decades of wars, poverty and spiralling inflation, the bank has been steadily expanding its retail and corporate business in the vast country.
Its main shareholders, Dubai Islamic Bank, Sharjah Islamic Bank and Abu Dhabi Islamic Bank, are currently more than tripling the capital to 1 billion Sudanese pounds (around $225m).
With Sudan largely cut off from international markets due to US sanctions over its human rights record, Bank of Khartoum is one of the few local banks with foreign ties.
The Islamic International Rating Agency (IIRA) last week gave the bank a short-term "A-1" rating with a stable outlook, the first-ever rating in a country with almost no transparency standards and a reputation for widespread corruption.
Bank of Khartoum hopes the rating will help attract banks and institutional investors from Sudan's main trading partners in the Gulf for its new business to help boost agricultural and mining exports, General Manager Fadi Faqih told Reuters.
"That gives us a reference for international agencies, funds, correspondent banks and financial institutions to look at Sudan, to look at Bank of Khartoum," he said. "It is a major milestone for us."
Faced with the loss of most oil reserves to South Sudan when it seceded in 2011, Sudan is trying to boost exports of gold and farming exports such as cotton, cash crops or gum arabic from its vast farmlands.
The loss of oil revenues, which used to be the main source for state revenues and dollars needed to pay for food imports, has thrown the economy into turmoil. The Sudanese pounds has more than halved in value since the secession.
The bank is preparing a fund to attract direct investment from mainly Gulf banks to invest into Sudan's agricultural sector. "That will be hopefully ready by the second quarter," he said, declining to give details.
The bank, which is celebrating its 100th anniversary, also plans to increase the number of retail branches this year to 70 from 55 across Sudan, he said.
Bank of Khartoum also plans to arrange Islamic bonds, or sukuks, for corporate clients in the infrastructure and utility sector for some 150 million pounds this year.
Its profit, driven by the retail and corporate business as well as foreign currency reserves benefiting from Sudan's currency devaluation, will rise to around 250 million pounds this year, after 200 million pounds in 2012.
The loan book will rise by around 17 percent in 2013, Faqih said.
IIRA forecast the bank's pre-tax profit to hit 592 million pounds in 2015, according to its ratings report.