Abu Dhabi Islamic Bank has raised $750 million through the issuance of Sharia-compliant bonds as the biggest Islamic lender by assets in the emirate continues to diversify its funding base.
The five-year non-call, tier-one perpetual sukuk offers a profit rate of 7.25 per cent per annum and will be listed on the London Stock Exchange, the lender said in a statement on Wednesday to the Abu Dhabi Securities Exchange, where its shares are traded.
The deal, which attracted interest from more than 240 global and regional investors, was nine times oversubscribed as the final order book exceeded $7 billion.
The deal highlights “the tremendous demand and confidence from global investors in ADIB's asset quality”, group chief executive Nasser Al Awadhi said.
“The overall success of this raise can be attributed to ADIB's clear ESG [environment, social and governance] framework and our strong track record of both growing market share and delivering sustainable returns.”
ADIB, which is rated “A2" by Moody’s and “A+” by Fitch, with a stable outlook, said the issuance received broad investor interest, with final allocations of 83 per cent going to Mena investors, 13 per cent to Europe and 4 per cent to Asian investors.
By investor type, private banks subscribed to 70 per cent of the total allocation while asset and fund managers accounted for 16 per cent, commercial banks for 10 per cent and other investors for 4 per cent.
ADIB said the sukuk issuance will maintain the bank’s “optimised capital structure” and its strong common equity tier-one position, a yardstick of a lender’s financial strength.
The perpetual sukuk was structured to comply with the Basel III regulatory framework, which includes detailed criteria for capital and liquidity.
HSBC and Standard Chartered Bank were the joint global co-ordinators and structuring agents for the deal, while ADIB, Citi, Emirates NBD Capital, First Abu Dhabi Bank, and JP Morgan acted as joint lead managers and joint bookrunners.
In April, ADIB reported a 48 per cent surge in its first-quarter net profit on the back of higher revenue and fee income.
Net profit attributable to equity holders of the bank for the three months to the end of March climbed to Dh1 billion ($272 million), compared with Dh715 million for the same period last year, the lender said at the time.
Revenue for the reporting period jumped 81 per cent annually to Dh1.42 billion, while fees and commission income rose 4 per cent to Dh300 million.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
