By Sam Bridge
Overseas demand for new shares is driven by the recent increase in bank's foreign ownership limit to 20%
Emirates NBD, Dubai's biggest bank, announced on Thursday that it has seen strong demand for new shares to be issued as part of its rights issue.
The lender said the subscription period for the new shares which aim to raise additional capital of AED6.45 billion ($1.76 billion) successfully closed on Wednesday.
The bank added in a statement that it saw strong demand from UAE, Middle East and international investors resulting in total funded commitments in excess of AED18 billion, representing an oversubscription of approximately 2.8 times.
Sheikh Ahmed Bin Saeed Al Maktoum, chairman, Emirates NBD said: “We appreciate the excellent response from existing shareholders in our first rights issue and are pleased to enjoy their strong support, a vote of confidence in Emirates NBD’s financial position and market standing.
"The positive response we have received will further strengthen our balance sheet and help progress milestones as we continue our growth journey and commitment to our shareholders”.
Overall demand in Emirates NBD's rights issue from non-UAE investors was in excess of AED11 billion, equivalent to 62.6 percent of the total funded commitments, driven by the recent increase in Emirates NBD's foreign ownership limit from 5 percent to 20 percent.
The net proceeds raised from Emirates NBD's rights issue will be used to strengthen the bank’s capital base and to support future growth, the statement added.