The tier 1 capital injection is being split between Union National Bank and Abu Dhabi Commercial Bank, which are receiving AED2bn each, and National Bank of Abu Dhabi, Abu Dhabi Islamic Bank and First Gulf Bank which will receive AED4bn each.
Hamad al Hurr al Suwaidi, undersecretary of the Abu Dhabi Finance Department, says “the government views this capital injection into the banking system as an important step to allow Abu Dhabi financial institutions to remain strong and well-capitalised compared to international peers, and fulfil their role in achieving the government’s vision for the Abu Dhabi economy.”
Tier 1 capital is a core measure of financial strength used by regulators, and includes shareholders equity and cash reserves.
The capital injections will be in the form of preference shares which do not holding voting rights.
JPMorgan advised the government on the structuring of the capital injection.