Emirates NBD shareholders approve Dh7.3 billion rights issue

28/03/2018 07:54 AST

The eleventh annual general meeting of Emirates NBD on Tuesday approved the bank’s proposed increase of capital through a rights issue of new shares worth up to Dh7.3 billion.

The increase in capital is believed to be for the acquisition of Turkey’s Denizbank. The bank said in January it had started initial strategic talks with Sberbank about a possible purchase of the Russian lender’s stake in Turkey’s Denizbank.

The new share issuance will strengthen ENBD’s regulatory Tier 1 capital ratio (per Basel II) to up to 22.2 per cent on a pro forma basis from 19.5 per cent as of December 2017. The roughly 22.2 per cent Tier 1 capital ratio would be well above the minimum Tier 1 capital ratio of 11 per cent. The rights issue will increase the bank’s regulatory capital amid implementation of Basel III capital requirements and IFRS9 accounting standards, providing additional headroom for future capital consumption from organic and inorganic asset growth.

In the special resolutions put up at the AGM, in addition to the approval for the proposed rights issues, ENBD shareholders approved the proposals for $12.5 billion (Dh45.91 billion) euro medium term notes (EMTN) programme, $1 billion structured note programme and $1.5 billion Australian dollar debt issuance.

Bank’s AGM approved the amendment and replacement of Article 6(A) of the memorandum and articles of association increasing the foreign ownership of shares up to 20 per cent.

At the AGM, the shareholders also reviewed the banks’ financial performance for the year 2017. “The UAE economy and the banking sector in particular performed well in 2017 in spite of a challenging regional and global environment. With two years to EXPO 2020 Dubai, the pace of development has quickened with a focus on projects and transport infrastructure. As the event’s Official Banking Partner, Emirates NBD has started preparing the ground work to ensure that banking services are at the forefront of innovation at Expo 2020 Dubai,” said Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and chairman of Emirates NBD.

40% dividend During 2017, the reported a net profit of Dh8.35 billion, up 15 per cent compared with the prior year. The AGM reviewed the financial results for 2017 while the shareholders meeting approved distributions of 40 per cent (Dh2.22 billion) cash dividend.

Emirates Islamic, the Islamic bank belonging to the Emirates NBD Group also held its 42nd General Assembly on Tuesday. The AGM reviewed and approved the consolidated financial statements of the bank for the year ending 31 December 2017.

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