(MENAFN - Khaleej Times) Abu Dhabi Commercial Bank, or ADCB, and Union National Bank, or UNB, have also repaid debts they obtained from the Ministry of Finance to boost their balance sheet after 2008's financial crisis.
ADCB on Wednesday said it paid Dh4 billions of a Dh6.6 billion subordinated loan to the UAE Ministry of Finance, while another Abu Dhabi-based financial institution UNB told Abu Dhabi Securities Exchange it also repaid Dh1.5 billion in federal government support it received after the global financial crisis in 2009.
Earlier, First Gulf Bank and National Bank of Abu Dhabi paid their financial obligations, to reflect strong liquidity and availability of finance on low interest rates.
The Ministry of finance placed Dh70 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. NBAD originally converted Dh5.6 billion of support into bonds but repaid Dh2.6 billion last year, while National Bank of Ras Al Khaimah , repaid all of its Dh684.5 million of support during 2012, reuters newswire said.
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. In a statement, ADCB's Chief Executive Officer, Ala'a Eraiqat, lauded the tangible support provided to the financial system at a time of global strain.
Eraiqat said as ADCB is very strongly capitalised with a Tier 1 ratio of 17.47 per cent and a liquidity ratio of 24 per cent; it was well within the bank's means to be able to repay a large part of this loan prior to the loan's scheduled maturity in 2016.
