Abu Dhabi Islamic aims to boost lending after capital increase

ADIB London UK headquarters (James Hanna for AN)
Updated 18 September 2018
0

Abu Dhabi Islamic aims to boost lending after capital increase

  • ADIB to increase lending this year
  • Bank set to complete rights issue next week

ABU DHABI: Abu Dhabi Islamic Bank expects to increase lending in 2018 after boosting its capital, its acting chief executive said, adding that the rate of profit growth will slow as the sharia-compliant bank battles against a sluggish economy.
An economy weakened by lower oil prices and a crowded banking market has hit the balance sheets of United Arab Emirates banks and hobbled loan growth.
ADIB, the largest sharia-compliant lender in Abu Dhabi, expects to increase profit in 2018 in single digit percentage terms, acting-CEO Khamis Buharoon Al-Shamsi said. This compares with growth of 18 percent in 2017.
“We cannot sustain the same (growth) this year. With the capital increase we will grow the balance sheet, we can lend more,” he told Reuters in an interview.
The bank expects to grow lending by up to 5 percent this year, compared with a drop of 2 percent in 2017.
ADIB will complete its 1 billion dirham ($272.4 million) rights issue next week, increasing its share capital to 3.63 billion dirhams from 3.17 billion.
Last week, ADIB raised $750 million of additional tier-one capital through a perpetual sukuk.
The bank is studying another capital increase in 2019, Al-Shamsi said.
He added that the bank was looking to lend to new business sectors, such as shipping, manufacturing, education and health and plans to grow its share of the retail market by spending on digital technology. It is investing $100 million in digital technology and has appointed a chief digital officer.
Abu Dhabi is reshaping its economy and consolidating state-owned companies to cope with the effects of lower oil prices.
Two of Abu Dhabi’s top banks were merged last year to create First Abu Dhabi Bank, while two of its big sovereign wealth funds were also combined.


Malaysian court delays Goldman case on 1MDB fund theft

Updated 33 min 57 sec ago
0

Malaysian court delays Goldman case on 1MDB fund theft

  • Malaysia filed criminal charges against three units and two ex-employees of the Wall Street titan in December
  • They are accused of misappropriating $2.7 billion and other crimes in relation to bond issues they arranged for 1MDB
KUALA LUMPUR: The Malaysian case against Goldman Sachs on charges the US investment bank stole huge sums from the country’s 1MDB state fund was postponed Monday until September after defense lawyers argued there was a problem with paperwork.
Malaysia filed criminal charges against three units and two ex-employees of the Wall Street titan in December, accusing them of misappropriating $2.7 billion and other crimes in relation to bond issues they arranged for 1MDB.
Allegations that huge sums were looted from the investment vehicle — in a fraud that allegedly involved former Malaysian leader Najib Razak — contributed to the last government’s election defeat last year.
At a procedural hearing in Kuala Lumpur Monday, Goldman lawyer Hisyam Teh Poh Teik said the Hong Kong unit of the bank received its summons just last week, while the summons sent to the Singapore unit only included three out of four charges.
The third Goldman unit in the case is based in London.
He asked for three months to get further instructions from his clients, and the judge set September 30 for another procedural hearing.
Prosecutor Aaron Paul Chelliah told reporters that the prosecution believed all documents had been properly served.
“Their clients have some reservations on whether they were properly served,” he said. “Our position is they have been served.”
Goldman helped arranged bonds totaling $6.5 billion on three occasions for 1MDB, for which they earned fees said to be well above typical rates.
The bank and its former employees are accused of making false and misleading statements to misappropriate huge sums from the 2012 and 2013 bond issuances.
Goldman has vowed to fight the charges, saying the former Malaysian government and 1MDB lied to the bank.
The former bankers accused in the case are Tim Leissner and Ng Chong Hwa, and both have also been charged in the US over the scandal.
Leissner pleaded guilty in America, while Ng was extradited to the US from Malaysia in May and pleaded not guilty.