UAE's United Arab Bank Raises AED1.031 Billion Through Rights Issue

Arab Bank Al Etihad Raises $280M in Oversubscribed Rights Issue, Signaling UAE Banking Sector's Capital Strength

United Arab Bank (UAB), listed on the Abu Dhabi Securities Exchange, has successfully completed a AED 1.031 billion ($280 million) rights issue that saw strong investor demand, boosting its paid-up capital by 50% as the UAE's banking sector continues to capitalize on regional economic growth and regulatory modernization.

Capital Injection Reflects Strategic Positioning

The rights offering, which concluded on July 29, increased UAB's issued and paid-up capital from AED 2.062 billion to AED 3.093 billion through new shares priced at AED 1 per share. The strong subscription rate demonstrates investor confidence in the bank's transformation strategy and growth prospects in a region experiencing significant economic diversification.

Sheikh Mohammed bin Faisal bin Sultan Al Qasimi, Chairman of UAB's Board of Directors, emphasized that the successful capital raise reflects both shareholder trust and the bank's solid financial position. The timing appears strategic, as UAE banks are positioning themselves to capture opportunities from the country's expanding non-oil economy and increasing financial sector sophistication.

Performance Momentum Supports Growth Strategy

The capital raise comes on the back of strong financial performance, with UAB reporting net profits of AED 208 million in the first half of 2025, representing a 50% increase compared to the same period in 2024. Total income rose 24% to AED 374 million, indicating robust business momentum that likely encouraged the positive investor response to the rights issue.

CEO Shreesh Bidikar highlighted that the additional capital will support the bank's next phase of strategic development while enhancing its ability to meet regulatory requirements and deliver competitive returns to shareholders.

Regional Banking Consolidation and Competition

UAB's successful capital raise occurs within a broader context of UAE banking sector strengthening. The country's financial institutions have been actively building capital buffers and expanding capabilities to compete with regional powerhouses and support the UAE's ambitions as a global financial hub.

This contrasts with banking sectors in other regional markets where capital constraints have limited growth opportunities. The UAE's regulatory framework, overseen by the Central Bank of the UAE and the Securities and Commodities Authority, has created an environment that encourages prudent expansion while maintaining financial stability.

Market Implications and Future Outlook

For investors, UAB's oversubscribed rights issue signals several positive trends. The strong demand suggests institutional and retail confidence in UAE banking fundamentals, while the bank's improving profitability metrics indicate effective management execution during a period of regional economic transformation.

The capital injection positions UAB to potentially pursue acquisitions, expand digital banking capabilities, or increase lending capacity in high-growth sectors such as renewable energy, technology, and logistics—areas where the UAE government has prioritized investment.

The successful fundraising also demonstrates the maturity of Abu Dhabi's capital markets, as local investors showed willingness to support expansion plans rather than seeking immediate dividend distributions. This patient capital approach mirrors successful banking development models seen in Singapore and Hong Kong during their financial sector growth phases.