Abu Dhabi: Abu Dhabi Islamic Bank (Adib) will vote on a proposal to raise capital through a rights issue to support the bank’s continued growth as well as to vote on a proposal to increase the bank’s programme for issuing tier 1 sukuk, the chief executive officer of the bank said on Thursday.
The proposed rights issue would raise Dh504 million in share capital while the tier 1 sukuk programme would increase to $3 billion from the existing approved limit of $2 billion, and discuss it in an extraordinary general meeting on June 21.
“We will be the first Islamic bank to trade rights issue in the market place. It is a positive feature and good news for the investors,” said Tirad Al Mahmoud, the bank’s chief executive officer.
The proposed issue of 168 million new shares, which will be fully underwritten, will be priced at Dh3 per share, which represents a 40 per cent discount to the current share price and will increase the bank’s share capital by Dh504 million, the bank said.
Shareholders will receive the right to buy 56 rights for every 1000 shares they own. In addition, for the first time in the UAE, rights issued by a bank will be traded on the Abu Dhabi Securities Exchange through approved brokers.
To pave the way for the rights issue, shareholders will be asked to vote on an amendment of Adib’s articles of association to increase the bank’s authorised share capital from Dh3 billion to Dh4 billion.
The bank raised $1 billion in late 2012 through the world’s first ever Sharia-compliant hybrid tier 1 sukuk and the region’s first publicly issued perpetual tier 1 instrument.
“Adib has experienced a period of strong expansion and we expect this growth trajectory to continue. In order to support our growth, the bank is looking to raise additional capital and as such we are now inviting our shareholders to participate in a rights issue.”
When asked about the falling oil prices and the impact on the bank, Mahmoud said the private sector in the UAE is diversified and strong.
“The UAE does not rely on oil for its economic activity. The budget in the UAE has been announced and we don’t see substantial changes in the budget. Lot of projects continue to progress on time. The private sector is robust and thriving.”
On real estate market scenario, he said Abu Dhabi continues to perform strongly in the real estate segment due to a strong leasing market whereas the dynamics of the real estate are changing from luxury to middle class in Dubai.
“We are well positioned in both Dubai and Abu Dhabi from real estate perspective. Our growth this year will focus on our traditional line of business like retail, commercial banking and SME sector. We do very well in those segments and will continue to do well.”
One of the largest retail banks in the UAE, Adib reported 20.7 per cent growth in net profit in 2014 with customer financing increasing 18.2 per cent from the previous year.
