First Gulf Bank announced that it will issue Tier 1 capital notes to the Government of Abu Dhabi

On 4 February 2009, and in response to the Government of Abu Dhabi’s initiative to inject additional capital into certain Abu Dhabi financial institutions, First Gulf Bank (FGB) announced that it will issue Tier 1 capital notes to the Government of Abu Dhabi, with a principal amount of AED 4 Billion (the "Notes"). The issuance of the Notes has been approved by First Gulf Bank’s Board of Directors on 4th February 2009 and will be subject to obtaining shareholders’ approval.

The Notes will bear interest at a fixed rate of 6% per annum payable semi-annually in arrear from (and including) the issue date for a period of five years, and thereafter at a floating rate, reset and payable semi-annually in arrear, reflecting the initial margin above the then prevailing six-month Emirates Interbank Offered Rate (EIBOR). The Notes are non-voting, non-cumulative perpetual securities, and are callable subject to certain conditions.

Abdulhamid Saeed, Managing Director of First Gulf Bank, stated that “FGB has had a great 2008 with a bottom line of AED 3,005 million based on a strong Balance Sheet and a Capital Adequacy Ratio of 14.1%. We are well on target to implement our growth plans for 2009 and beyond. In view of the ongoing global crisis, we believe that markets in general will better value banks with strong capital positions. The Tier 1 capital injection by the government goes hand in hand with FGB’s growth plan and complements our objective to be a well capitalized banking entity. This confidence building measure from the Government of Abu Dhabi to show solidarity with the banking system in Abu Dhabi is a strong message to the Financial Services Industry across the globe and is heartily welcomed."

View News Headlines