First Abu Dhabi Bank's board has approved a proposed AED15 billion ($4.08 billion) rights issue priced at AED13.52 per share, seeking fresh capital to finance expansion across the UAE and its international operations.The Abu Dhabi lender said the proposal, announced on Wednesday, remains subject to shareholder and regulatory approval. It plans to issue 1,109,467,456 new shares at a 30 per cent discount to its closing price on the Abu Dhabi Securities Exchange on 10 November.
Shareholders will vote on the transaction at a general assembly scheduled for 7 December. FAB expects to complete the offering during the first quarter of 2027, provided the necessary approvals are secured.
Mubadala Investment Company, the bank's largest shareholder with a 37.9 per cent holding, intends to subscribe for its full entitlement. Its participation would provide substantial support for the capital raising, although the final subscription arrangements have yet to be announced.
Existing shareholders will be entitled to purchase new shares in proportion to their holdings, enabling those who participate fully to preserve their percentage ownership. Investors who do not exercise their rights could see their stakes diluted as the bank increases its issued share capital.
FAB said the proceeds would increase its capacity to pursue lending, investment banking and other business opportunities, while maintaining financial flexibility. The proposed deployment includes expanding relationships with corporate clients, developing international trade corridors and investing in technology and artificial intelligence.
The bank has set medium-term targets covering 2026 to 2031, including annual loan growth of 10 to 15 per cent and revenue growth within the same range. It also aims to deliver a return on tangible equity exceeding 17 per cent across the economic cycle, raising its previous guidance of more than 16 per cent.
Its dividend ambition exceeds AED50 billion cumulatively over the six-year period. These objectives are targets rather than guaranteed outcomes and depend on business conditions, capital requirements and the bank's ability to deploy additional funds profitably.
FAB is targeting a common equity tier one capital ratio above 14 per cent before dividends and a cost of risk below 70 basis points. The bank also intends to preserve its AA- credit standing and diversified funding arrangements as it expands.
An investor presentation indicated that the proposed issuance could increase the bank's common equity tier one ratio by approximately 190 basis points. The additional buffer would give FAB more capacity to support asset growth while retaining capital against potential losses.
Hana Al Rostamani, FAB's group chief executive officer, said the capital would be allocated selectively to opportunities capable of strengthening the bank's market position and producing sustainable shareholder returns. She identified the UAE and the bank's established international network as priorities for expansion.
Sheikh Tahnoon bin Zayed Al Nahyan, chairman of FAB, linked the proposal to the UAE's economic diversification programme and rising investment in international trade and capital flows. He said the transaction would strengthen the lender's ability to finance strategic investments at home and overseas.
The proposed fundraising follows substantial growth in FAB's balance sheet and earnings. The bank reported total assets of AED1.47 trillion at the end of September 2026, reinforcing its position as the UAE's largest lender by assets.
FAB said its net income had doubled since 2020 to AED21.1 billion, while return on tangible equity had risen by 6.2 percentage points to 19.2 per cent. It distributed AED44 billion in cash dividends between 2020 and 2025.
The bank operates in more than 20 markets and serves customers through 25 trade corridors linked to the UAE. Its expansion strategy centres on financing cross-border commerce, infrastructure development and investment flows alongside domestic banking activity.
The final entitlement ratio, eligibility date, ex-rights date, trading period for rights and subscription timetable will be disclosed after the necessary approvals. The terms remain indicative and may change before the offer opens.
The rights issue would increase FAB's issued share count by approximately 10 per cent, according to its investor presentation. The offer price is below the prevailing market quotation, but the economic value of shareholders' holdings will also depend on the eventual ex-rights share price and the value of any tradable entitlements once trading begins.
FAB will act as lead manager, bookrunner and sole receiving bank. J. P. Morgan is financial adviser, while Allen Overy Shearman Sterling is providing legal advice on the transaction.
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