Abu Dhabi's biggest bank FAB asks shareholders for $4.08 billion at a 30% discount

First Abu Dhabi Bank (FAB), the UAE's largest lender by assets, said Wednesday it plans to raise Dh15 billion ($4.08 billion) through a rights issue to fund "the next phase" of its growth in the UAE and across its international network, according to The National, which cites the bank's statement. Reuters carried the same figure and called it one of the largest Gulf rights issues in recent years.

The terms

• FAB will offer 1,109,467,456 new shares at Dh13.52 each, a 30% discount to Tuesday's close on the Abu Dhabi exchange.
• Working backwards from that discount, Tuesday's close was roughly Dh19.31 a share. That is our arithmetic, not a figure FAB published.
• Mubadala Investment Company, FAB's largest shareholder, plans to subscribe for its full pro-rata entitlement, the bank said.
• Reuters reported completion is expected in the first quarter of 2027, per its report syndicated on Yahoo Finance. We did not find a shareholder vote date in a source we could read in full.

Multiplying shares by price gives Dh15.0 billion, so the headline figure is the maximum if every right is taken up. Zawya and Bloomberg round the amount to $4.1 billion; Reuters and The National say $4.08 billion, the more precise conversion.

The number behind the number

The bank is not short of profit. FAB reported third-quarter profit up 6% from a year earlier, and nine-month net profit attributable to shareholders of $4.47 billion, per The National. A raise of $4.08 billion is therefore close to a full nine months of earnings. The discount is large by design: a deep discount makes it likely existing holders take up their rights, and it is why Mubadala's commitment matters as an anchor.

A rights issue also differs from a share sale to new investors. Existing shareholders who do not take up their rights see their ownership diluted; those who do pay in cash for the new shares. The headline discount is not a gift, since the share price typically adjusts after the terms are announced.

Why now

The National notes that Gulf capital markets remain active despite the fallout from the Iran war, with companies including ADNOC, Abu Dhabi Commercial Bank, G42 and Mamoura Diversified Global Holding tapping equity markets for fresh funds. Bloomberg had reported on November 9 that FAB was weighing a multibillion-dollar rights issue, so the announcement confirmed a leak by two days. FAB has not given a split between UAE lending and overseas expansion beyond its statement that it wants to "deploy capital with discipline," in the words of group chief executive Hana Al Rostamani.

Who it touches

Holders of FAB shares face a decision with a deadline once the offer period opens: subscribe, sell the rights or accept dilution. For corporate borrowers and trade-finance clients across the region, extra capital gives the bank more room to lend. We found no reporting on the market's reaction to the announcement, so we do not state one.

Sources: The National; Reuters via Yahoo Finance; Zawya; Bloomberg. Dirham-dollar conversions as reported. This is market information, not investment advice.