October 6, 2016 / 12:36 PM / a year ago

Emirates Islamic Bank to beef up capital with $408 mln rights issue

DUBAI, Oct 6 (Reuters) - Emirates Islamic Bank, the shariah-compliant arm of Dubai’s largest lender, said on Thursday it plans to raise 1.5 billion dirhams ($408 million) in a rights issue to increase its capital.

It is the latest Gulf bank to seek to raise its capital ratios, either through a rights issue or the sale of capital-boosting bonds or sukuk, to replenish reserves after a period of strong lending growth and to meet new global banking standards.

The rights issue will increase the bank’s paid up share capital from 3.93 billion dirhams to 5.43 billion dirhams, it said in a statement. Each new share will be priced at 1 dirham.

Rights issues in the Gulf are traditionally sold at substantial discounts to attract local subscribers.

Owned by Emirates NBD, the bank said it has board approval and will now call an extraordinary general meeting at a later date to approve the move.

In June, Dubai Islamic Bank completed a 3.2 billion dirham rights issue aimed at bolstering the capital base of the United Arab Emirates’ largest sharia-compliant lender. ($1 = 3.6726 UAE dirham) (Reporting by Tom Arnold; Editing by Alexander Smith)

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