Sharjah government plans to invest $517m in Invest Bank
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Sharjah government plans to invest $517m in Invest Bank

Sharjah government plans to invest $517m in Invest Bank

The government will buy 1.59 billion shares in the bank, which has struggled due to high levels of bad loans


The Government of Sharjah will invest up to Dhs1.9bn ($517.32m) in struggling Invest Bank, the lender said on Wednesday, disclosing details of the two-stage investment plan.

The government stepped in to support Invest Bank, one of the smaller banks in the UAE, after it was hit by recent high levels of bad loans, partly due to its exposure to the troubled real estate and construction market.

It will buy 1.59 billion shares of Invest Bank for Dhs1.115bn, or 50.07 per cent of the total issued share capital of the bank, Invest Bank said.

This is to enable Invest Bank to maintain capital adequacy after booking provisions of Dhs1.266bn in the third and fourth quarter financial statements, it said.

Shareholders of the bank will meet on December 29 to approve the capital increase. Barclays is advising Invest Bank for the fund raising programme.

The Sharjah government will also subscribe in full to the shares offered to it as part of a rights issue to be undertaken by Invest Bank in 2019 and any new shares offered to other shareholders, which remain unsubscribed.

“The Government of Sharjah would subscribe for such remaining shares, in each case subject to its aggregate commitment of Dhs785m, as capital support for further potential provisions to be booked during 2019,” it said.

The UAE’s central bank has pledged to stand ready to extend “all the available liquidity facilities” to Invest Bank and that it had been working to develop a plan to strengthen the lender’s capital base.


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