Abu Dhabi Islamic Bank (ADIB) has announced plans to increase its capital base via a 1 billion dirham ($272 million) rights issue.

The bank said on Thursday afternoon that it would increase its share capital through the issue of 464 million new shares with a nominal value of one UAE dirham per share, but with each share issue attracting a premium of 1.16 per share, bringing the total value raised to 1 billion dirhams.

The bank's board has also approved the issue of a new, $750 million tier 1 sukuk, and the repayment of a $1 billion tier 1 sukuk raised in 2012, which was the world's first Shariah-compliant, tier 1 sukuk.

Vice-chairman Khamis Buharoon said in a press statement that the bank was looking to raise the money to maintain a solid capital buffer while continuing strong growth, adding that it had almost doubled customer numbers over the past five years to one million.

He said the issue would "enable ADIB to continue to invest in innovation to provide top-quality banking services, and to deliver the returns our investors have come to expect”.

ADIB's rights issue will be subject to the approval of its shareholders at a forthcoming general meeting, and will increase the bank's total issued capital to 3.632 billion shares.

Last week, the bank reported a 3 percent year-on-year increase in net profit to 1.16 billion dirhams for the first half of 2018. Although net revenue for the period decreased by 1.9 percent year-on-year to 2.7 billion dirhams, the level of impairments and provisions it had to make against loans dropped by 17.2 percent to 315.2 million dirhams, down from 380.8 million in the same period a year earlier.

ADIB's announcement of a rights issue to increase its capital buffer comes less than two months after competitor Dubai Islamic Bank completed a 5.1 billion dirham rights issue to increase its tier 1 capital.

(Writing by Michael Fahy: Editing by Anoop Menon)

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