ABU DHABI: Two Abu Dhabi banks yesterday repaid Dh5.5bn ($1.49bn) in UAE government support they received in the wake of the global financial crisis, following the lead of other lenders moving to replace the funds with cheaper financing.
The UAE ministry of finance injected Dh70bn ($19bn) into the banks to shore up balance sheets after the collapse of Lehman Brothers in September 2008 triggered a crisis in the global financial system. The support was converted into seven-year, capital-boosting bonds in late 2009.
Banks, however, were expected to speed up repayment of the funds this year as the value of the capital instruments was diminishing and banks could raise cheaper finance in the market. Abu Dhabi Commercial Bank repaid Dh4bn out of a total of Dh6.6bn. The bank had raised $1.5bn in a two-part bond sale in February. Earlier in the day, Union National Bank repaid Dh1.5bn out of Dh3.2bn, the lenders said in a separate bourse statement yesterday.
The banks received all approvals from the UAE Central Bank and the ministry of finance, the statement said.
The repayments have signalled a return to normal capital-raising practices in the Gulf state, more than four years after the global financial crisis broke.
Earlier in the week, First Gulf Bank fully repaid Dh4.5bn it received. National Bank of Abu Dhabi, the largest UAE lender by market value, originally converted Dh5.6bn of support into bonds but repaid Dh2.6bn last year, while National Bank of Ras Al Khaimah, the UAE's ninth-largest bank by market value, repaid all of its Dh684.5m of support during 2012. Reuters
