National Bank of Ras al-Khaimah (RAKBANK) has received approval from shareholders to raise its Foreign Ownership Limit (FOL) by 20 per cent, the bank announced on Thursday.
The new FOL – which requires further regulatory approval – would be 40 per cent and aims to improve the liquidity available to foreign investors, the lender said in a statement.
“The decision to increase the limit of foreign ownership is important to us as we are currently running very close to our existing limit of 20 per cent,” said Peter England, who took over as the bank’s CEO in November 2013.
“As an actively traded stock on Abu Dhabi exchange (ADX), we see extensive demand for RAKBANK stock by interested parties from across the globe. Despite a tight free float, a higher limit on foreign ownership makes additional room for international buyers and also complements the recent developments of the UAE’s stock markets to attract new foreign investments.”
Banks in the UAE and Qatar are currently reviewing their foreign ownership caps ahead of an upgrade by MSCI to emerging market status, which comes into effect end of May. Experts expect the move to bring in increased foreign capital to these markets.
Lenders such as Mashreq and Dubai Islamic Bank have also raised their FOLs in the last few months.
RAKBANK, which recently announced a nine per cent drop in first quarter net profit, recorded total assets of Dhs31.5 billion at the end of the first three months. As of March 31 2014, the bank’s earnings per share stood at Dhs0.2, total shareholders’ equity was approximately Dhs6 billion and its capital adequacy ratio was 27.6 per cent.