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Mon 8 Mar 2010 08:39 PM

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Sharjah Islamic Bank opts to split, not cut, dividend

Bank CEO said move was an effort to abide by recently issued central bank guidelines.

Sharjah Islamic Bank opts to split, not cut, dividend
SPLIT DIVIDEND: Sharjah Islamic Bank announced that it would split its dividend to 5% cash and 5% stock rather than cut a previously proposed 10% cash dividend. (Getty Images)

Sharjah Islamic Bank said on Monday it would split its dividend to 5 percent cash and 5 percent stock rather than cut a previously proposed 10 percent cash dividend.

Chief executive Mohammed Abdullah said the move was an effort to abide by recently issued central bank guidelines that put a cap on cash dividends to 50 percent of annual profits.

Annual earnings rose to $70.83 million from $63.05 million in 2008.

Had the bank issued a full cash dividend, it would have constituted 88 percent of profit.

Abdullah, speaking at the company's annual general meeting, said he had promised shareholders a cash dividend of 10 percent of the par value of shares, or $62.8 million in total. To keep that promise the company chose to split its dividend.

Citing the same central bank guidelines, Sharjah based United Arab Bank reduced its cash dividend to 15 percent in February from a previously proposed 22 percent.

Sheikh Sultan bin Mohammed al Qassimi, crown prince of Sharjah and chairman of Sharjah Islamic Bank, said the bank was able to weather the financial storm last year by restructuring its mortgage policies and improving its corporate governance and risk management.

Assets of the bank climbed almost 3 percent to $4.35 billion at the end of 2009. (Reuters)

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