|26 February, 2019

First Abu Dhabi Bank's shareholders approve plan to lift foreign ownership limit

Increase to 40% of bank shares, up from 25%, is expected to push FAB's weighting higher in MSCI and FTSE indices, analysts says

First Abu Dhabi Bank head office situated at Khalifa Business Park in Abu Dhabi. Image used for illustrative purpose.

First Abu Dhabi Bank head office situated at Khalifa Business Park in Abu Dhabi. Image used for illustrative purpose.

First Abu Dhabi Bank/ Handout via Thomson Reuters Zawya

First Abu Dhabi Bank (FAB), the largest bank in the United Arab Emirates, said in a statement to the Abu Dhabi Securities Exchange on Tuesday that its shareholders have approved a raise to the bank’s foreign ownership limit.

FAB’s general assembly approved in its meeting an increase to the bank’s foreign ownership limit to 40 percent, up from 25 percent, subject to the Securities and Commodities Authority and other competent authorities’ approval.

“The move should increase FAB’s eight in MSCI and FTSE’s emerging market indices and trigger passive flows into the stock,” Shabbir Malik, banking analyst at EFG-Hermes told Zawya by email.

First Abu Dhabi Bank’s weight was of 0.21 percent in the MSCI Emerging Markets Index as of January 31, while data from the Abu Dhabi index showed that foreign investors (non-UAE nationals) held around 12 percent of the bank’s stock.

Shareholders also approved a dividend of 0.74 percent at the AGM, after which group CEO Abdulhamid Saeed said in a press statement that the payment of 8.06 billion UAE dirhams, up six percent on the prior year, was “a record total for FAB and the highest dividend distribution in the UAE this year”.

Earlier this month, the bank announced a 3.9 percent increase in fourth quarter 2018 net profit. (Read more here)

FAB’s shares were trading flat on Tuesday at 15.08 dirhams per share at 12.30 GST, but have added so far 7.52 percent since the start of the year.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@refinitiv.com)

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© ZAWYA 2019

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