DIB increases foreign ownership limit of its shares to 40%

The increase in the FOL is aimed at boosting the lender’s weightage in FTSE and MSCI global market indexes

Dubai Islamic Bank last month reported second-quarter profit of Dh1bn amid continued economic recovery. Jeffrey E Biteng / The National
Beta V.1.0 - Powered by automated translation

Dubai Islamic Bank, the biggest Sharia-compliant lender in the UAE by assets, on Thursday increased foreign ownership limit of its shares to 40 per cent from 25 per cent after receiving regulatory approval as the lender looks to broaden its investor base.

The lender raised the limit after it received approvals from the Central Bank of the UAE and Securities and Commodities Authority, DIB said in a statement to the Dubai Financial Market, where its shares are traded.

The increase in the ceiling of foreign ownership is driven primarily by strong demand from large institutional investors and their rising confidence in the bank’s growth ambitions as the UAE's economy rebounds from the coronavirus pandemic, DIB said.

Several banks in the UAE, including First Abu Dhabi Bank, Emirates NBD, Commercial Bank of Dubai and Abu Dhabi Islamic Bank, have increased foreign ownership caps on their stocks to attract more investors.

DIB received shareholders’ approval in March 2020 to increase its foreign ownership limit. The move is set to boost DIB’s weightage in FTSE and MSCI global market indexes, the lender said.

“The increase ... will serve as another catalyst at a critical juncture with DIB’s alignment to the fast recovering economic environment,” Adnan Chilwan, group chief executive of DIB, said.

“Global investor community has shown strong confidence in the UAE’s financial and capital markets as well as DIB.”

The UAE economy continues to recover on the back of fiscal and monetary support and as global trade rebounds and economies of developed countries also bounce back from the deepest recession since the 1930s.

The UAE economy is expected to grow 2.4 per cent this year. The non-oil economy of the Emirates is expected to expand around 4 per cent this year and next, while overall economic growth is expected to be 3.8 per cent in 2022, the UAE Central Bank said in June.

DIB, which reported second-quarter profit of Dh1bn, said it is well positioned to benefit from the economic bounce back, as global investors seek to shift their investments towards stronger and more stable financial markets.

With the upcoming Expo 2020 and the country’s golden jubilee, DIB remains committed to supporting “economic ambitions” of the UAE, Mr Chilwan said.

Updated: August 05, 2021, 8:36 AM
EDITOR'S PICKS
NEWSLETTERS