| 07 Jul 2009 |
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Noor Islamic Boosts Capital to Fund Growth and Expansion Plan
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DUBAI - Noor Islamic BankNoor Islamic Bank
, Dubai-based Shariah-compliant lender, is well capitalised to fund growth and expansion plan and its capital adequacy ratio, or CAR, is double the regulator's limit, the bank said on Monday. The bank, partly owned by Dubai government, said the conversion of government deposits into tier-2 capital has put it in a strong position to weather the economic downturn.
The bank further said that its CAR is now above 20 per cent, twice as high as the minimum requirement set out by the central bank.
"The CAR or Cooke Ratio is crucial in the banking industry as it defines the minimum capital requirements for banks to be able to support and cover for their risks on and off balance sheet," said Sofia El Boury, a senior research associate at Shuaa Capital, UAE's largest investment bank.
Tier 1 and Tier 2 respectively relate to core capital and supplementary capital. It is the cushion the bank holds in order to cover for the risks it is exposed to as per its core businesses.
Boury said that a CAR well above the regulatory requirement is a strong signal and a warranty that a bank is comfortably capitalised and hence fully capable of covering the risks engaged on and off balance sheet.
First Gulf Bank's overall CAR was 17.3 per cent on March 31, 2009 while RAK Bank was at 21 per cent on the same date, according to spokeswomen ?of the banks.
Group Chief Executive Officer Noor Islamic BankNoor Islamic Bank Hussain Al Qemzi said, "With our capital adequacy ratio more than double the minimum Central Bank requirement, we are well poised to continue further expansion and investment within the UAE."
By Abdul Basit
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