Sharjah’s Invest Bank approves Dh1.1bn investment and appoints new chairman
Shareholders also voted to reshuffle board and approved increase in share capital
The shareholders of Sharjah-based commercial lender Sharjah Invest appointed Sheikh Sultan Bin Ahmed Al Qasimi – a member of the Sharjah ruling family – as its new chairman, as they approved a Dh1.15 billion strategic investment from the Government of Sharjah.
“Our priority is to keep improving the bank’s asset quality by reinforcing enhancements made to the risk processes and policies and further strengthening underwriting standards and implementing portfolio management best practices,” Sheikh Al Qasimi said in a statement to media on Wednesday.
His appointment was part of a bigger reorganisation of the board of directors, Invest Bank said in the statement.
It also comes after the Sharjah government said it would take a majority stake in the lender last December, aiming to return the bank to profit after it posted a Dh136.5 million loss in 2018.
Invest Bank operates a network of 15 branches in the UAE and an international branch in Lebanon. It is one of the Emirates’ smaller banks and was hit by high levels of bad loans in recent years, partly due to its exposure to the real estate and construction industry, which has suffered a slowdown since oil prices dipped in 2014.
In December, the board of directors said they would recommend a capital injection by the Sharjah government, which would make it a majority strategic investor in the lender.
Invest Bank did not detail what the Dh1.15bn strategic investment will be used for. It will be made on a commercial basis, the statement on Tuesday said, “with the objective of creating long-term value from Invest Bank’s underlying profitability and standing as an operationally strong financial institution with a loyal customer base across the UAE.”
“Over the medium term, we aim to return the bank to profitable growth through a strategy that allows us to improve operating margins and tap into commercially-viable opportunities,” Sheikh Al Qasimi added.
Shareholders also approved through a special resolution a further increase in share capital for all shareholders, to be underwritten by the government up to a certain amount that the statement did not disclose.
The details, including the timing of the share increase, are to be determined later, the bank said.
Updated: April 10, 2019 05:53 PM