Malaysia Bank Islam arranging $290 million bonds

Bank Islam Malaysia Bhd, Malaysia's oldest Islamic lender, is arranging two Islamic bond issues worth 1 billion ringgit ($290 million), the Business Times newspaper reported on Saturday.
Bank Islam Managing Director Zukri Samat was quoted by the daily as saying the bank was raising the bonds for two corporations - a plantation group and a conglomerate. He declined to provide further details. "We hope to secure more of such mandates as we are all geared up to boost income from our newly established corporate investment banking division," Zukri said.
Islamic bonds, called sukuk, are typically backed by physical assets that pay a dividend or rent to bondholders rather than interest, which Islam equates with usury.
Bank Islam said on Thursday it has returned to profitability after two years of losses with a pre-tax profit of 165.8 million ringgit for the half-year ended December 31, 2006. About 60 percent of the profit came from loan recovery, the bank said.