Emirates NBD plans to raise foreign ownership to 40%

Bloomberg / WAM

Emirates NBD Bank (Emirates NBD), on Monday announced its intention to increase Foreign Ownership Limit (FOL), to 40 percent in the future, and will seek necessary approvals from its shareholders and the relevant regulatory authorities, in due course.
Emirates NBD also announced the implementation of an immediate increase in its FOL from 5 percent to 20 percent after having obtained the necessary regulatory approvals and the agreement of the Emirates NBD Shareholders and Board of Directors.
Lenders in six-nation Gulf Cooperation Council are trying to broaden the base of their investors. First Abu Dhabi Bank PJSC, proposed removing the limit after raising it to 40% in February.
“The news will bode well not only to Emirates NBD but also for the UAE markets as a whole,” said Ali El Adou, head of asset management at Daman Investments in Dubai. “The indication to increase FOL to 40% was more than what investors have been expecting.”
The move comes after Emirates NBD completed acquisition of Turkey’s Denizbank AS for $2.65 billion in July.
Emirates NBD could be included in the emerging market benchmarks compiled by MSCI Inc. and FTSE Russell in the first half of next year, triggering inflows of about $426 million, according to estimates by Mohamad Al Hajj, an equities strategist at EFG-Hermes Holding SAE in Dubai.
HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Emirates NBD, said, “In line with our position as a strategic partner to the UAE government, we are confident that today’s announcement will contribute to support the vision and goals of the country’s leadership and developing the UAE as a pivotal hub in the global economy.”
He added, “The announcement will strengthen UAE’s proposition as one of the most attractive economies for foreign direct investment and contribute to increased liquidity and depth in UAE’s capital markets. Further, the announcement is aimed at diversifying bank’s investor base as Emirates NBD continues to deliver value to its shareholders.”
Foreigners held 5% of Emirates NBD shares as of Sunday and Dubai’s government 55.76 percent, according stock exchange data.