Dubai Islamic Bank, the UAE’s biggest sharia-compliant lender, said on Sunday its Dh5.1 billion rights issue received subscriptions in excess of Dh14bn, with more than half of requests coming from foreign investors.
The bank announced the issuance of 1.6 billion additional shares at price of Dh3.11 per share in April to boost its core capital, it said in an emailed statement. The deal, which closed towards the end of May, is part of the bank’s strategy to preemptively create capacity to support its growth plans in the future.
“Growth remains on the horizon for DIB. This exercise is a strategic move for us,” Adnan Chilwan, the group chief executive said. “The capital boost will help maintain our competitive edge whilst meeting regulatory requirements as we further progress our growth ambitions in the medium term.”
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Read more:
DIB's credit growth may climb to 15% this year, Moody's says
Emirates NBD, DIB post higher-than-forecast first quarter net profit
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Moody’s Investors Service last week said the DIB rights issue along with the issuance of $1bn of sukuk in January will ensure stable liquidity levels of above 20 per cent of tangible banking assets over the next 12 to 18 months for the lender.
"The capital increase is credit positive for DIB because it replenishes reserves and enhances loss-absorption buffers .... after high growth during 2013-17," Moody's said in a report released on Thursday.
The deal which has increased total shareholder equity to Dh31.2bn from Dh26.1bn as of March 2018, "will support DIB's liquidity" which had been on the decline since 2013 as a result of higher-than-average-credit growth. Moody’s expects DIB’s credit growth to be 10 to 15 per cent in 2018.
DIB has doubled in size and tripled its profitability in the last four years, Mr Chilwan noted.
“The bank’s financial position has become stronger than ever before with vastly improved asset quality and significantly more robust balance sheet that today offers even more opportunities to grow,” he said.
In April, the bank posted a 16.4 per cent year-on-year jump in first quarter net profit, as revenues climbed on the back of higher income from fees and commission business.
Net income attributable to equity owners surged to Dh1.17bn from Dh1bn reported for the same period in 2017, DIB said in a statement to the Dubai Financial Market at the time. Net revenue for the period amounted to Dh1.97bn, a 9 per cent rise from a year-earlier, supported by 15.5 per cent growth in fees and commissions income, it said.
The results beat five analysts' estimates averaging Dh1.14bn, according to Bloomberg. The first-quarter net income was above SICO Bahrain's forecast by 4 per cent.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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- Elena Aleksandrovna Georgieva, chair of the board of Novikombank, a state-owned defence conglomerate.
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1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
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2. Sebastian Vettel, Ferrari 247
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4. Daniel Ricciardo, Red Bull 177
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6. Max Verstappen, Red Bull 93
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Barcelona 4 (Messi 23' pen, 45 1', 48', Busquets 85')
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The nine articles of the 50-Year Charter
1. Dubai silk road
2. A geo-economic map for Dubai
3. First virtual commercial city
4. A central education file for every citizen
5. A doctor to every citizen
6. Free economic and creative zones in universities
7. Self-sufficiency in Dubai homes
8. Co-operative companies in various sectors
9: Annual growth in philanthropy
match info
Southampton 2 (Ings 32' & pen 89') Tottenham Hotspur 5 (Son 45', 47', 64', & 73', Kane 82')
Man of the match Son Heung-min (Tottenham)
