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Abu Dhabi, UAESaturday 20 April 2019

NBF gets nod to raise debt ceiling for boosting capital

Shareholders also approved cash and share dividend for 2018

National Bank of Fujairah shareholders approve cash share dividend.  Sarah Dea / The National
National Bank of Fujairah shareholders approve cash share dividend.  Sarah Dea / The National

The National Bank of Fujairah, which counts the emirate’s government and Dubai’s sovereign wealth fund as shareholders, received shareholders’ approval to increase the ceiling of is Tier-1 capital to $636.1 million (Dh2.33 billion).

Tier-1 capital consists of shareholders' equity and retained earnings. It is intended to measure a bank's financial health.

The shareholders, through a special resolution, have raised the bar of non-convertible additional Tier 1 capital instruments by $500m in a bid to strengthen the bank’s capital base, NBF said on Monday.

The lender is looking to raise $350m from the capital markets this year through a Tier-1 issue, Vince Cook, chief executive of NBF told The National earlier this month. The bank, which has already converted an earlier Tier-1 capital bond into equity and paid a Tier-2 tranche tranche - supplementary capital composed of items such as subordinated term debt - in November, is awaiting the right time to place the issue in the market.

“It seems to be good time but the question on everybody’s mind is what is going to happen to interest rates,” Mr Cook said at the time.

The Investment Corporation of Dubai, the emirate's sovereign wealth fund, owns 9.8 per cent of the bank, while the Government of Fujairah has a 40.2 per cent stake in the Abu Dhabi-listed lender.

NBF posted its best ever operating and net profit for full-year 2018. Operating profit climbed to Dh1.1bn, up 15.2 per cent year-on-year, while its net income rose 30.4 per cent to Dh615.3m. Loans and advances and Islamic financing receivables rose 8.9 per cent to Dh26.2bn, while customer deposits increased by 9.4 per cent Dh30.5bn.

The bank’s shareholders on Monday also approved the distribution of profits of 20 per cent of paid-up capital divided into cash dividends of 7.5 per cent (Dh123.3m) and bonus shares of 12.5 per cent (Dh205.6m).

Updated: March 18, 2019 04:57 PM

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