Commercial Bank of Dubai, which counts Investment Corporation of Dubai as its biggest shareholder, became the latest lender in the UAE to allow foreign ownership of its shares, as it looks to broaden its investor base.
The bank, which is 20 per cent controlled by ICD, set a foreign ownership limit of 40 per cent after it received approval from the company’s shareholders at its annual general assembly meeting this week, CBD said in a statement to the Dubai Financial Market, where its shares trade.
"The bank has received substantial interest from foreign investors, which was the main driver for us setting the FOL at the level announced today," said Bernd van Linder, chief executive of Commercial Bank of Dubai. "It will allow us to broaden our investor base as well as sustain capital inflows in the UAE."
Several banks in the UAE, the second biggest Arab economy, have increased foreign ownership caps on their stocks to attract more external investors after the country eased FOL restrictions last year.
Earlier this year, Dubai Islamic Bank and Abu Dhabi Islamic Bank, raised their foreign ownership limit to 40 per cent from 25 per cent after obtaining approval from their shareholders in March.
“CBD has been supporting the UAE economy over the past five decades and with this announcement, we are confident that we will continue supporting the UAE’s vision and goals to be one of the most attractive economies for foreign investment,” Mr van Linder said.
The new foreign ownership limit will come into effect starting on June 14, the bank said. Its share ended 0.91 per cent lower on Thursday.
Commercial Bank of Dubai reported a 7 per cent slide in the first quarter this year, as impairment allowances rose and revenue fell amid the coronavirus pandemic.
Net profit for the three months ending March 31 declined to Dh315 million. Net impairment charge climbed 5 per cent year-on-year to Dh240m due to “higher forecast credit losses expected on the back of the Covid-19 pandemic as well as specific credit provisions”, while revenue dropped 2.3 per cent to Dh757m, the bank said at the time.
Total assets grew 2.1 per cent to Dh89.9 billion, while loans and advances rose 3.6 per cent from the end of last year to reach Dh62.3bn. Customer deposits increased 1 per cent to Dh63.9bn during the period.
