Thursday 26, July 2018 by Jessica Combes

ADIB to increase capital by AED 1 billion through rights Issue

 

This increase supports ADIB’s objectives in achieving its 2020 vision while meeting regulatory requirements.

The Board of Directors of Abu Dhabi Islamic Bank (ADIB) has recommended to increase the issued capital of the bank by AED 464 million issuing new shares at a nominal value of AED 1 per share as well as an issuance premium of AED 1.16 per share, bringing the total value of the Rights issue to AED 1 billion. This increase supports ADIB’s objectives in achieving its 2020 vision while meeting regulatory requirements.

The rights issue is subject to regulatory approvals and by the bank’s shareholders at a general meeting, which will be scheduled for the coming weeks.

The board has also proposed the issuance of a $750 million (AED 2.75 billion) perpetual tier 1 sukuk, and the repayment of its $1 billion sukuk that was successfully issued in 2012 as the world’s first Shari’a- compliant hybrid tier 1 sukuk. 

The proposed rights issue would increase the issued capital from AED 3,168,000,000 to AED 3,632,000,000 through issuance of 464,000,000 new shares.

“The pace of the bank's growth has been fast, increasing its number of customers to one million in the UAE, nearly double the number it had five years ago. To maintain its growth trajectory, while maintaining a solid capital buffer, the bank is looking to increase its capital. We are therefore inviting our shareholders to participate in our growth trajectory through a rights issue. This will enable ADIB to continue to invest in innovation to provide top-quality banking services, and to deliver the returns our investors have come to expect from ADIB,” said Khamis Buharoon, ADIB Vice Chairman and acting CEO.

ADIB reported a 17.7 per cent increase in net profit in 2017, which reached AED 2.3 billion. Robust revenues growth, while maintaining a disciplined approach to cost and risk management. The bank paid a dividend of 28.87 per cent for 2017, representing a pay out of 39.76 per cent of full-year net profit.

The proposed issue of 464 million new shares, will be issued at AED 2.16 per share, which represents a 45 per cent discount to the closing share price on 25 July.

ADIB will set the timetable for the rights issue and the tier 1 following shareholder approval.

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