Abu Dhabi Islamic Bank, the biggest Sharia-compliant lender in the emirate, has raised Dh504 million from a rights issue that was oversubscribed nearly three times.
The sale of shares to existing shareholders was the first tradable issue of its kind by a bank in the UAE, meaning that the right to the shares could be sold by existing investors to other buyers.
The bank sold 168 million shares at Dh3 apiece by the end of the September 10 subscription period, it said. Some Dh1.46 billion was committed by investors for the issue.
The Abu Dhabi-based lender is raising cash to fund growth plans that include beefing up its business in Egypt and other emerging markets.
“ADIB is in the process of enhancing its capital to support our growth strategy, and is pleased to have promoted the further development of the UAE capital markets by proving that secondary equity offerings can draw strong investor interest,” said Tirad Al Mahmoud, the chief executive.
“With our strong and diverse capital base, we now are focused on continued expansion and delivering the superior returns our shareholders and capital market investors have come to expect of us.”
ADIB is also increasing its so-called tier 1 capital instruments programme to US$3bn from the existing approved limit of $2bn.
That comes as a period of rapid expansion for the bank has left its so-called capital ratios tighter than its peers, analysts say. New global banking regulations, including Basel III, also require banks to be better capitalised.
Other UAE lenders, including FGB have in recent weeks been tapping the debt market to raise more funds. Last week, FGB said it raised $1bn in a three-year loan, some $250m more than it had initially envisaged.
mkassem@thenational.ae
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