ADIB plans Dh1.75 billion rights issue for growth

Abu Dhabi Islamic Bank’s board has approved plans to raise up to Dh1.75 billion through a rights issue, strengthening its capital base as the lender pursues faster expansion under its Vision 2035 strategy.

The proposed transaction will involve the issuance of as many as 106.38 million new ordinary shares at Dh16.45 each. The subscription price represents a discount of about 28.8 per cent to ADIB’s closing price of Dh23.10 on the Abu Dhabi Securities Exchange on August 24.

Eligible shareholders are expected to receive the right to subscribe for approximately one new share for every 34.14 shares they already hold. The terms remain subject to shareholder and regulatory approvals, including clearance from the Central Bank of the UAE and the Securities and Commodities Authority.

The bank has scheduled a general assembly meeting for October 6 to consider the proposed capital increase. If approved, ADIB’s issued share capital would rise by about 2.9 per cent, from roughly Dh3.63 billion to Dh3.74 billion.

The transaction would increase the number of outstanding shares from about 3.63 billion to 3.74 billion. Each new share will carry a nominal value of Dh1 and a share premium of Dh15.45, accounting for most of the subscription price.

The rights issue comes during a period of rapid balance-sheet expansion for ADIB. Total assets reached Dh304 billion at the end of June, crossing the Dh300 billion threshold for the first time. Assets had already expanded by 24 per cent during 2025 to Dh281 billion.

Customer financing has also risen sharply. Gross customer financing increased by 26 per cent year on year during the first half, adding about Dh43 billion compared with the corresponding period of 2025 and Dh24 billion since the start of 2026.

Customer deposits reached Dh246 billion at the end of June, up 15 per cent from Dh213 billion a year earlier. Current and savings accounts accounted for about 64 per cent of total deposits, providing the bank with a substantial pool of relatively low-cost funding.

The pace of financing growth has increased the importance of maintaining sufficient capital to support new business while protecting regulatory ratios. The rights issue gives existing shareholders an opportunity to contribute fresh equity while retaining their proportional ownership if they exercise their subscription rights.

ADIB reported first-half net profit after tax of Dh3.8 billion, an increase of 8 per cent from the same period last year. Profit before tax rose 9 per cent to Dh4.3 billion, while revenue increased 9 per cent to Dh6.5 billion.

Second-quarter net profit reached about Dh1.9 billion, also up 8 per cent year on year. Operating income for the quarter increased 7 per cent to Dh3.3 billion, supported by higher funded income, while impairment charges declined.

The bank entered 2026 after a record year. Net profit after tax for 2025 reached about Dh7.1 billion, while profit before tax rose 18 per cent to Dh8.1 billion. Revenue increased 16 per cent to Dh12.3 billion.

Shareholders earlier approved cash dividends of about Dh3.52 billion for 2025, equivalent to 97.05 fils a share and about half of annual net profit. The payout was higher than the 83 fils per share distributed for the previous year.

ADIB added about 283,000 customers during 2025 and another 125,000 during the first half of this year, reflecting continued expansion across retail, corporate and institutional banking.

Vision 2035 is intended to guide the lender’s next phase of development, including stronger digital capabilities, artificial intelligence, expansion of core businesses and deeper customer relationships. The strategy also seeks to reinforce ADIB’s position in the Islamic banking market as demand for Sharia-compliant financing and investment products expands.