DUBAI - Sharjah-based Invest Bank's accumulated losses stood at 2.21 billion dirhams ($601.72 million) at the end of 2019, 70% of its capital, the bank said in a bourse filing.
In 2018, the government of Sharjah stepped in after the bank was hit by high levels of bad loans, partly due to its exposure to the troubled real estate and construction sectors.
Invest Bank said the accumulated losses were a result of "weak governance and credit underwriting and monitoring practices experiences by the bank in the past, compounded by a subdued economic environment that led to a further deterioration of the credit quality of its loan portfolio," which forced the bank to book large provisions.
The bank said it would use its special and legal reserves, each about 450.7 million dirhams, to amortize part of the accumulated losses. That would decrease the accumulated losses to 41.3% of its issued capital, it said.
The agreement with the government of Sharjah allowed Invest Bank to double its issued share capital to 3.2 billion dirhams in 2019 from 1.6 billion dirhams the year prior, the bank said.
Last year, Invest Bank's shareholders approved a proposal to hand the Sharjah government a 50.07% stake in the lender.
($1 = 3.6728 UAE dirham)
(Reporting by Yousef Saba; editing by David Evans) ((Yousef.Saba@thomsonreuters.com; +971562166204))