UNB repays nearly half of govt support
Dubai, March 6, 2013
Abu Dhabi-based Union National Bank on Wednesday said it repaid nearly half of the $871 million in federal government support it received after the global financial crisis in 2009.
Abu Dhabi's fourth-largest lender by market value paid back 1.5 billion dirhams ($409 million) out of 3.2 billion dirhams ($871 million) it received, it said in a bourse statement.
The UAE's Ministry of Finance placed 70 billion dirhams ($19 billion) with banks to shore up balance sheets after the collapse of Lehman Brothers in September 2008 triggered a seizure of the world's financial system.
However, banks were expected to prioritise repaying this support, converted into seven-year capital-boosting bonds in late 2009, this year as the value of the capital instruments was diminishing and banks could raise cheaper finance in the market.
Earlier this week, First Gulf Bank fully repaid 4.5 billion dirhams it received.
National Bank of Abu Dhabi originally converted 5.6 billion dirhams of support into bonds but repaid 2.6 billion dirhams last year, while National Bank of Ras Al Khaimah , the UAE's ninth-largest bank by market value, repaid all of its 684.5 million dirhams of support during 2012.
Last week, Abu Dhabi Commercial Bank raised a $750 million subordinated bond as part of a $1.5 billion two-tranche debt offering. Subordinated debt can be counted towards a bank's Tier 2 capital ratio. - Reuters