United Arab Bank says rights issue oversubscribed by 124% for Dh850m

United Arab Bank, the Sharjah lender, said yesterday its rights issue was subscribed by 124 per cent, with total subscriptions of Dh850 million.

The bank completed its rights issue on March 7.

UAB plans to increase the bank’s capital by Dh687.5m to Dh2.063bn from its earlier level of Dh1.375bn.

The rights issue will be in the form of 687.5 million newly issued shares, with new shares priced at Dh1 per share, UAB said in a statement.

The bank is now completing the process of raising capital and seeks to obtain all required approvals from the Securities and Commodities Authority, it said. “The oversubscription of the rights issue reflects the confidence that our shareholders have in the bank and its future endeavours,” said Sheikh Mohammed Al Nuaimi, acting chief executive of UAB.

“Our revised business model which is backed by the strong economy in the UAE positions us well to deliver sustainable returns for our shareholders going forward.”

UAB, whose shares are listed on the Abu Dhabi Securities Exchange, is in the midst of restructuring, following the accumulation of non-performing loans in the midst of the UAE’s slowing economic growth in 2015-16.

The bank, which suffered from high exposure to the SME sector, reported losses of Dh522.7m in 2016, but posted a net income of Dh17m for 2017 “as the successful execution of its transformation strategy paved the way for a return to profitability”, the statement said.

“The bank has substantially strengthened its balance sheet, focussed on core activities, de-risked the business and captured material cost savings.”