UAE banks turn to shareholders for capital as deposit growth lags

UAE banks are lining up to raise fresh equity as lending outpaces deposits, with more raises still in the pipeline. Abu Dhabi Islamic Bank’s (ADIB) AED 1.75 bn rights issue opened for subscription yesterday — the fourth UAE bank raise since mid-2025, bringing the total to ~AED 11.5 bn. Meanwhile, First Abu Dhabi Bank (FAB) is in early talks about a rights issue of around USD 5 bn (~AED 18.4 bn), Bloomberg reports — about triple the biggest rights issue ever done on the ADX. FAB declined to comment and may not proceed.

ADIB’s timetable: Subscription runs until 24 November. Shareholders can buy new shares at AED 16.45 each, 28.8% below the closing price the day before the board approved the raise in August. Rights trade on the ADX until next Monday, 16 November, while new shares start trading next Wednesday, 18 December.

FAB’s plans are still early: Executives have held informal talks with several large Wall Street banks, though it’s unclear if any have been hired, and the size could change. One Bloomberg source said the money would go toward prospects in the UAE.

The queue: Before ADIB, three UAE banks raised from shareholders — ADCB’s AED 6.1 bn in December, United Arab Bank’s AED 1.03 bn in 3Q 2025, and Sharjah Islamic Bank’s AED 2.59 bn in May.

Why it matters: The raises are about keeping up with lending. Credit growth outpaced deposit growth in 2Q, pushing banks to pay up for deposits. Fresh equity lets banks keep lending without stretching their capital ratios — SIB’s capital adequacy ratio rose to 19.5% at end-June from 16.2% at end-2025 after its raise.

With IPOs scarce all year, analysts told our UAE desk in September to expect more rights issues and follow-on offerings from established, liquid names in 4Q 2026 and early 2027.

Investors have shown up so far: SIB’s issue was 3.2x oversubscribed, with foreign investors at 55% of demand. ADCB drew more than AED 12 bn in commitments for its AED 6.1 bn raise, with Mubadala taking up its full entitlement.

What’s next: ADIB’s subscription closes on 24 November, and the take-up will be the first read on demand since SIB in May. For FAB, watch for it to mandate banks, secure board approval, and obtain a shareholder vote — steps required by every earlier raise. Mubadala is also a top FAB shareholder, so whether it commits to its full share will set the tone, as it did for ADCB.