NBAD repays Dh1bn to MoF

Authorities had provided additional Tier 2 capital, in the form of subordinated notes to local banks

National Bank of Abu Dhabi (NBAD), the largest lender by market value in the UAE, has repaid Dh1 billion ($272.3 million) of subordinated notes to the country's Ministry of Finance, it said on Thursday.

The sum was part of Dh5.6 billion provided by the government in January 2010 as part of a wider move to support the UAE banking system.

Under the plan, the UAE authorities provided additional Tier 2 capital, in the form of subordinated notes, to every bank in the country to strengthen their capital bases and head off any solvency concerns.

The Dh5.6 billion of subordinated debt consisted of a seven-year bond paying a coupon of 4.5 per cent. After the notes were absorbed into the bank's capital structure, it took its capital adequacy ratio to 23.5 per cent.

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