First Abu Dhabi Bank plans to raise Dh15 billion ($4.08 billion) through a rights issue as it prepares for “the next phase” of its growth strategy across the UAE and its global portfolio.
The UAE's biggest bank will be offering 1,109,467,456 new shares, with each to be offered at Dh13.52, a 30 per cent discount on its closing share price on Tuesday, a FAB statement on Wednesday said.
Mubadala Investment Company, FAB’s largest shareholder, plans to subscribe for its full pro-rata entitlement, which is a reflection of its “continued confidence” in FAB’s strategy and long-term growth prospects, the bank said.
“The UAE continues to advance an ambitious long-term economic agenda, underpinned by diversification, investment, innovation and a growing role in global trade and capital flows,” said Sheikh Tahnoon bin Zayed, chairman of FAB.
“FAB is at the centre of this growth, enabling strategic investment across the UAE and internationally. The proposed rights issue will further strengthen FAB’s ability to support the UAE’s ambitions and capture the opportunities ahead.”
The rights issue is also meant to capture “significant opportunities” in the UAE and across FAB's international network, group chief executive Hana Al Rostamani said.
Aside from the Gulf, FAB also maintains a presence in the Middle East, Africa, Asia, Europe and the Americas.
“The strength of our home market, combined with the reach and connectivity of our international network, gives us a strong platform for growth,” Ms Al Rostamani said.
Capital markets in the UAE continue to sustain their momentum despite the fallout from the war in Iran, prompting companies to tap into equity markets for additional funds through secondary shares sales and rights issues.
Other notable companies to have done so include Adnoc, Abu Dhabi Commercial Bank, artificial intelligence company G42 and Mamoura Diversified Global Holding, an investor in Dubai telecom firm du.
“We will deploy capital with discipline and focus, pursuing opportunities that deepen our competitive position, expand the scale and reach of our franchise, and deliver superior, sustainable returns for our shareholders,” Ms Al Rostamani said.
Last month, FAB reported a 6 per cent annual jump in third-quarter profit, as net interest income, and fee and commission income grew on the back of strong business activity.
Net profit attributable to shareholders for three months to the end of September climbed to Dh5.73 billion. Nine-month profit grew 3 per cent to Dh16.4 billion.
