FAB outlined an offering that could bring in up to 15 billion dirhams, or $4.1 billion, by granting existing holders rights to purchase 1.1 billion new shares priced at 13.5 dirhams. According to the bank, the proceeds will support growth in the United Arab Emirates and overseas, preserving capital robustness, liquidity, and overall financial flexibility.
Bloomberg News previously reported FAB had been exploring an equity raise of about $5 billion.
As the UAE's biggest lender, FAB holds $400 billion in assets and sports a $59 billion market value, serving as a main channel through which Abu Dhabi's oil revenues flow to the local economy. Last month, the lender posted third-quarter operating income and profit that beat forecasts, and its shares have topped Abu Dhabi's benchmark this year after bouncing back from a post-war trough.
Jefferies analysts said the proceeds will likely lean toward domestic expansion rather than international deals, and they anticipate the move will lift the bank's Common Equity Tier 1 ratio, an important capital yardstick. Mubadala, a top shareholder with a 37.9% stake, intends to take up its full pro-rata entitlement.
Rights issues let current holders buy additional shares in proportion to their stakes. Abu Dhabi Commercial Bank PJSC, the city's second largest lender, raised $1.7 billion a little more than a year ago. Like FAB, the bank lists Mubadala Investment Co. among its top shareholders.
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In plain English, choosing to participate affects your ownership percentage and per share metrics, while skipping can dilute your stake. Elsewhere, two other UAE banks - Sharjah Islamic Bank and Abu Dhabi Islamic Bank PJSC - have unveiled rights offerings this year to fund expansion and bolster core capital ratios.
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