UNB part-pays government loan

Bank repays $409m out of $871m it received

Abu Dhabi-based Union National Bank on Wednesday said it repaid nearly half of the $871 million in federal government support it received after the global financial crisis in 2009.

Abu Dhabi's fourth-largest lender by market value paid back Dh1.5 billion ($409 million) out of Dh3.2 billion ($871 million) it received, it said in a bourse statement.

The United Arab Emirates' ministry of finance placed Dh70 billion ($19 billion) with banks to shore up balance sheets after the collapse of Lehman Brothers in September 2008 triggered a seizure of the world's financial system.

However, banks were expected to prioritise repaying this support, converted into seven-year capital-boosting bonds in late 2009, this year as the value of the capital instruments was diminishing and banks could raise cheaper finance in the market.

Earlier this week, First Gulf Bank fully repaid Dh4.5 billion it received.

National Bank of Abu Dhabi originally converted Dh5.6 billion of support into bonds but repaid Dh2.6 billion last year, while National Bank of Ras Al Khaimah , the UAE's ninth-largest bank by market value, repaid all of its Dh684.5 million of support during 2012.

Last week, Abu Dhabi Commercial Bank raised a $750 million subordinated bond as part of a $1.5 billion two-tranche debt offering. Subordinated debt can be counted towards a bank's Tier 2 capital ratio.

  • Twitter
  • submit to reddit
comments powered by Disqus


Most Popular in Business


Emirates 24|7

In Case You Missed It ...

Happiness Meter Icon