ID :
50952
Tue, 03/17/2009 - 13:10
Auther :
Shortlink :
https://oananews.org//node/50952
The shortlink copeid
Mashreq and RAK Banks to convert federal deposits to regulatory capital
Mashreqbank PSC, the largest private bank in the UAE, on Monday announced plans to convert federal government deposits into regulatory capital according to a report in "Khaleej Times."
Separately, RAK Bank also said it will follow suit by seeking shareholders’ approval for capital conversion next month.
Mashreqbank’s shareholders on Sunday allowed the board to take all necessary actions to oversee the conversion, the bank said in a statement, but declined to disclose how much of the Finance Ministry deposits it received under an emergency package unveiled last year.
Top lenders National Bank of Abu Dhabi, or NBAD, and Emirates NBD have already announced similar moves to offset the impact of global credit crisis on domestic banking industry.
“Shareholders have shown strong support for the bank, helping us retain profit levels and build a strong capital base through internal capitalisation. As a result, our capital adequacy stands at 14 per cent, which is above the UAE Central Bank requirements,” said Abdul Aziz Al Ghurair, Chief Executive Officer of Mashreqbank.
In another development, the RAK Bank also announced a plan seeking shareholders’ approval to convert emergency federal deposits made last year into regulatory capital to stave off the financial crisis.
RAK Bank, or The National Bank of Ras Al Khaimah, will seek approval for its move at an extraordinary shareholders’ meeting to be held on April 8, according to a statement posted on the Abu Dhabi Securities Market web site.
The RAK Bank is one of the smallest banks in the UAE with a market value of around US$614 million.
The bank strongly focuses retail and consumer credit. The bank closed unchanged at Dh3.05 on Monday.
Banks in the UAE are looking to shore up their stockpile of capital as loan defaults mount and they take provisions for more bad loans to come. Regulatory capital is used as a cushion to support banks in case of surprise losses.
There are 24 local banks operating in the country and out of which 16 are conventional and eight are doing business under Shariah laws.
Loans at the UAE banks exceeded customer deposits by Dh110 billion and the government was looking for a way to bridge the gap, the UAE Central Bank governor said last week. The UAE Finance Ministry set up a Dh70 billion facility last year to deposit money into banks. So far, it has deposited Dh50 billion of that cash.
Banks across the energy rich Gulf region have written down the value of investments and taken provisions against an expected rise in bad loans after the region’s economic boom came to an end late last year as oil prices collapsed.
Meanwhile, Mashreqbank shareholders’ also approved a 10 per cent cash dividend and stock dividend of one free share for every 10 held.
The scrip closed five per cent down to Dh174.60 on Monday.
Separately, RAK Bank also said it will follow suit by seeking shareholders’ approval for capital conversion next month.
Mashreqbank’s shareholders on Sunday allowed the board to take all necessary actions to oversee the conversion, the bank said in a statement, but declined to disclose how much of the Finance Ministry deposits it received under an emergency package unveiled last year.
Top lenders National Bank of Abu Dhabi, or NBAD, and Emirates NBD have already announced similar moves to offset the impact of global credit crisis on domestic banking industry.
“Shareholders have shown strong support for the bank, helping us retain profit levels and build a strong capital base through internal capitalisation. As a result, our capital adequacy stands at 14 per cent, which is above the UAE Central Bank requirements,” said Abdul Aziz Al Ghurair, Chief Executive Officer of Mashreqbank.
In another development, the RAK Bank also announced a plan seeking shareholders’ approval to convert emergency federal deposits made last year into regulatory capital to stave off the financial crisis.
RAK Bank, or The National Bank of Ras Al Khaimah, will seek approval for its move at an extraordinary shareholders’ meeting to be held on April 8, according to a statement posted on the Abu Dhabi Securities Market web site.
The RAK Bank is one of the smallest banks in the UAE with a market value of around US$614 million.
The bank strongly focuses retail and consumer credit. The bank closed unchanged at Dh3.05 on Monday.
Banks in the UAE are looking to shore up their stockpile of capital as loan defaults mount and they take provisions for more bad loans to come. Regulatory capital is used as a cushion to support banks in case of surprise losses.
There are 24 local banks operating in the country and out of which 16 are conventional and eight are doing business under Shariah laws.
Loans at the UAE banks exceeded customer deposits by Dh110 billion and the government was looking for a way to bridge the gap, the UAE Central Bank governor said last week. The UAE Finance Ministry set up a Dh70 billion facility last year to deposit money into banks. So far, it has deposited Dh50 billion of that cash.
Banks across the energy rich Gulf region have written down the value of investments and taken provisions against an expected rise in bad loans after the region’s economic boom came to an end late last year as oil prices collapsed.
Meanwhile, Mashreqbank shareholders’ also approved a 10 per cent cash dividend and stock dividend of one free share for every 10 held.
The scrip closed five per cent down to Dh174.60 on Monday.
