First Gulf Bank plans $2.5bn bonds

(CRAIG SCARR)   

 


The First Gulf Bank is proposing to issue convertible bonds of up to $2.5 billion (Dh9.17bn), according to a notice filed yesterday with the Abu Dhabi Stocks Markets (ADSM), where the bank’s stock is listed.

It announced the bank has called an extraordinary general meeting of its shareholders to discuss the directors’ proposal on February 25 in Abu Dhabi. The meeting will also decide on the directors’ proposal on the increase of bank capital through the distribution of bonus shares.

During the middle of last year, First Gulf Bank had postponed a proposed $3.5bn Eurobond plan as it felt that the time was not right to go to the market.

If approved, the bonds would be converted into shares of the bank at a later date. The bank’s stock opened at the ADSM yesterday at Dh22.50 and rose during the intra-day trading to a high of Dh24 before closing at Dh23.65. More than 2.18 million shares changed hands yesterday.

First Gulf Bank is also holding an annual general meeting on the same date, and if it does not get the necessary quorum, the meeting will be held again on March 3. The general meeting will vote on the distribution of 20 per cent cash dividend and a further 10 per cent

in bonus shares based on the bank’s performance during 2007.


Earlier, the bank had announced spectacular results for the past year with a record profit of more than Dh2 billion – an increase of around 31 per cent on its 2006 performance.

Total operating income rose 37 per cent to Dh2.8bn, with net interest of Dh1.3bn representing an increase of 10 per cent. Other operating income totalled Dh1.5bn, reflecting an increase of 74 per cent. Earning per share rose by 31 per cent from Dh1.23 to Dh1.61.

The bank’s consistent growth was coupled with healthy profitability, efficiency, liquidity and capital adequacy ratios with return on average equity at 21 per cent, return on average assets at 3.3 per cent, cost to income ratio at 21.6 per cent, loan to deposits ratio at 85 per cent and a capital adequacy ratio of 15 per cent, demonstrating ongoing strong financial performance and Basel compliance. Assets stood in excess of Dh73 billion and grew its assets by 53 per cent.

Customers’ deposits rose by 52 per cent, and its loan book by 77 per cent.

Non-performing loans to gross loans were at a ratio of only 1.0 per cent, which is comparable to the best performing, highly-rated international banks.
 
 
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