Deutsche executes Islamic profit rate swap of over $500 million


Deutsche Bank in October closed an Islamic profit rate collar trade with Dubai Islamic Bank (DIB). The deal was more than $500 million in notional and is the largest such trade done in the Islamic markets, says the German bank.

The hedging structure required more flexibility than a vanilla Islamic profit rate swap (PRS). Deutsche Bank and DIB structured an off-balance-sheet solution based on an Islamic PRS with caps and floors.

DIB treasurer Mohammed Saleem says: "We had a specific risk that n