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Union National Bank repays nearly half of UAE government loan

Union National Bank on Wednesday said it repaid nearly half of the US$871 million in federal government support it received after the global financial crisis in 2009.

Abu Dhabi lender Union National Bank on Wednesday said it repaid nearly half of the US$871 million in federal government support it received after the global financial crisis in 2009.

Abu Dhabi's fourth-largest lender by market value paid back Dh1.5 billion out of Dh3.2bn it received, it said in a bourse statement.

The Ministry of Finance placed Dh70bn with banks to shore up balance sheets after the collapse of Lehman Brothers in September 2008 triggered a seizure of the world's financial system.

However, banks were expected to prioritise repaying this support, converted into seven-year capital-boosting bonds in late 2009, this year as the value of the capital instruments was diminishing and banks could raise cheaper finance in the market.

Earlier this week, First Gulf Bank fully repaid Dh4.5bn it received.

National Bank of Abu Dhabi originally converted Dh5.6bn of support into bonds but repaid Dh2.6bn last year, while National Bank of Ras Al Khaimah, the UAE's ninth-largest bank by market value, repaid all of its Dh684.5m of support during 2012.

Last week, Abu Dhabi Commercial Bank raised a $750m subordinated bond as part of a $1.5bn two-tranche debt offering. Subordinated debt can be counted towards a bank's Tier 2 capital ratio.

 

* Reuters

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