Ajman Bank to raise Dh675m through rights issue

Ajman Bank announced plans for a Dh675 million ($183.8 million) rights issue to help bolster the United Arab Emirates-based lender's capital base.

One of the smallest lenders in the Gulf Arab state, Ajman Bank will issue 500 million new shares at a price of Dh1.35 per share, with the subscription period running between May 30 and June 12, it said in a bourse statement on Monday.

Shareholders can subscribe for one new share for every 2.247 shares they hold. Those wishing to sell their rights to buy new stock can do so between May 22 and June 5.

A number of banks in the Gulf have been seeking to raise new capital in recent months to support growth after a period of rapid lending and to meet the incoming Basel III global banking regulatory requirements.

Many had hoped to do this through capital-boosting bonds and sukuk, although National Bank of Kuwait said last month that it plans a rights issue and Bahraini lender BBK is currently marketing convertible securities.

Ajman Bank's total capital adequacy ratio -- a key indicator of a bank's health which incorporates core Tier 1 and supplementary Tier 2 capital -- stood at 13.39 per cent as of December 31, according to the bank's 2015 financial statement.

Banks in the UAE must hold a minimum ratio of 12 per cent.

Emirates Financial Services is book-runner for Ajman Bank's rights issue.

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