UAE’s Ajman Bank to raise $184m through rights issue
Ajman Bank announced plans for a 675 million dirham ($183.8 million) rights issue to help bolster the United Arab Emirates-based lender’s capital base.
One of the smallest lenders in the Gulf Arab state, Ajman Bank will issue 500 million new shares at a price of 1.35 dirhams per share, with the subscription period running between May 30 and June 12, it said in a bourse statement on Monday.
Shareholders can subscribe for one new share for every 2.247 shares they hold. Those wishing to sell their rights to buy new stock can do so between May 22 and June 5.
A number of banks in the Gulf have been seeking to raise new capital in recent months to support growth after a period of rapid lending and to meet the incoming Basel III global banking regulatory requirements.
Many had hoped to do this through capital-boosting bonds and sukuk, although National Bank of Kuwait said last month that it plans a rights issue and Bahraini lender BBK is currently marketing convertible securities.
Ajman Bank’s total capital adequacy ratio — a key indicator of a bank’s health which incorporates core Tier 1 and supplementary Tier 2 capital — stood at 13.39 percent as of Dec. 31, according to the bank’s 2015 financial statement.
Banks in the UAE must hold a minimum ratio of 12 percent.
Emirates Financial Services is bookrunner for Ajman Bank’s rights issue.