UAE's National Bank of Fujairah secures shareholder approval to raise capital to $544mln

Bank to issue more than 85.2mln bonus shares for capital expansion

  
Investors look at electronic display boards on the trading floor at the Dubai International Financial Market March. Image for illustrative purposes.

Investors look at electronic display boards on the trading floor at the Dubai International Financial Market March. Image for illustrative purposes.

REUTERS/Mohammed Salem

Shareholders of National Bank of Fujairah have authorised the board of directors to increase the company’s paid-up capital to 2 billion dirhams ($544 million). 

The bank will be issuing more than 85.2 million bonus shares from retained earnings for the capital expansion, a statement said. 

The capital boost is in compliance with a new regulation by the Central Bank of UAE that requires banks incorporated in the country to have at least 2 billion dirhams of paid-up capital. 

“The increase in paid-up capital will further strengthen the bank in compliance with the new CBUAE regulation,” NBF said. 

Ratings agency S&P Global had earlier warned that the new capital rule could put pressure on smaller banks and lead to more consolidation. 

“While most of the country’s larger banks will easily meet or exceed the 2-billion-dirham requirement, some smaller banks may struggle, including some that have recorded significant losses or declining profitability over the past year,” S&P said in June. 

(Writing by Cleofe Maceda; editing by Seban Scaria ) 

Cleofe.maceda@refinitiv.com 

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© ZAWYA 2021

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