Sharjah Islamic Bank to raise foreign ownership limit to 40%

Board of directors approves proposal; move in response to high investor interest 

A man walks past a Sharjah Islamic Bank branch on Sheikh Zayed road in Dubai January 11, 2012.

A man walks past a Sharjah Islamic Bank branch on Sheikh Zayed road in Dubai January 11, 2012.

REUTERS/Jumana El-Heloueh

UAE-based lender Sharjah Islamic Bank (SIB) is set to increase the foreign ownership limit of its shares to 40 percent as part of its growth strategy, the bank said on Tuesday. 

The company’s board of directors has just approved the proposal, which will then be taken up in the upcoming general assembly, the lender told the Abu Dhabi Securities Exchange (ADX). The move is also in response to strong investor interest. 

“Such an important step comes in response to strong demand from investors, which indicates the extent and depth of their confidence in the bank,” the bank said. 

SIB is the latest UAE lender to increase the ceiling on foreign investment. Companies in the Gulf have been easing limits on foreign ownership of their stocks. 

Last August, Dubai Islamic Bank (DIB) announced it would allow non-UAE nationals to own up to 40 percent of its shares, up from 25 percent. Earlier, UAE telecom operators Du and Etisalat raised the foreign ownership limit to 49 percent of their capital. 

According to Mohamed Abdalla, CEO of SIB, allowing foreigners to own more shares will also help the bank improve its performance. 

“The increase in foreign ownership… represents a new additional incentive to enhance the bank’s performance, as it also continues to keep pace with the accelerated recovery witnessed in the current environment.”

The bank’s net profit for the first nine months of the year reached 458 million dirhams ($124.7 million), up by 29.6 percent from 353.4 million dirhams in the same period last year. 

(Writing by Cleofe Maceda; editing by Seban Scaria  )

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