Dubai: American banking major Bank of America Corp. (BofA) has bought 1.51 per cent stake in Dubai’s largest Bank Emirates NBD.
Emirates NBD sources confirmed the transaction, but said the acquisition of 100 million shares worth about Dh900 million is likely done through market deals.
“These types of transactions are done by banks mostly for their high networth individual clients or institutional clients,” a source said.
A bank source said Emirates NBD - and the acquirers - have not reported it to Dubai Financial Market because the transaction is not large enough that it warrants a market filing under the rules rules set by the Securities and Commodities Authority (SCA).
Rules are clear
According to the SCA rule on sale and purchase of shares in public shareholding companies in the UAE, the company management and investors need to report only if the transaction exceeds 5 per cent of total shares available. In addition, the SCA requires that once the 5 per cent threshold is crossed, any 1 per cent increase or decrease in share ownership must be disclosed to the market.
Emirates NBD reported net profits of Dh2.1 billion for the first three months of the year. Quarter-on-quarter, profit improved 3 per cent, while year-on-year it declined 24 per cent. In 2019, the bank had a 44 per cent jump in net profit to Dh14.5 billion, up from the Dh10 billion in 2018.
The increase came as net interest income jumped 34 per cent year-on-year, while fee and commission income was up 38 per cent.