The five-year paper will pay a coupon of 1.5 per cent per annum. FGB is in discussions with investors with a view to a private placement. The issue will comprise 93 million units priced at AED 8.6 ($2.3). The move more than doubles FGB’s existing capital, which stood at AED 742.8 million ($202.4 million) at the end of September.

‘We have chosen to go down the convertible bond route because it is better suited to our needs and preserves the rights of existing shareholders,’ says a senior FGB official. ‘We have reached a stage where the existing capital is insufficient for further growth.’

FGB on 27 October posted a 42.8 per cent increase in nine-month profits to AED 81.6 million ($22.2 million) on the corresponding period in 2002. ‘The rise reflects strong improvements across the range of our activities,’ says the official. Assets climbed 32.1 per cent to AED 6,585 million ($1,794 million) over the first three quarters.

However, the most notable feature of the results is the ballooning of the balance sheet: loans and advances almost doubled to AED 4,731.7 million ($1,289 million) as did customer deposits, which rose to AED 4,961.5 million ($1,352 million).