Market News

Dubai lender gets positive rating

Dubai Islamic Bank
Dubai Islamic Bank headquarters in Nairobi. FILE PHOTO | NMG 

Leading Gulf lender Dubai Islamic Bank (DIB), which launched Kenyan operations last year, has gotten a favourable rating from Moody’s of US after a successful cash call last month.

DIB raised Sh139.99 billion (AED5.1 billion) in a rights issue, which closed May 30, helping increase shareholders’ equity to Sh856.44 billion (AED31.2 billion) from Sh716.45 billion (AED26.1 billion) in March.

Shareholders equity is a metric used to measure the health of a firm by subtracting total assets from liabilities.

The UAE’s largest Islamic bank announced Sunday its offering was over-subscribed 2.7 times, with a half of the interest coming from foreign institutional investors.

“The capital increase is credit positive for DIB because it replenishes reserves and enhances loss-absorption buffers of the bank after high growth during 2013-17 and will improve its liquidity,” Moody’s said in a global credit outlook update last Thursday.

DIB in April 2017 got approval from the Central Bank of Kenya to operate a local subsidiary, DIB Kenya, becoming the third full-fledged Islamic bank in the country after Gulf African Bank in 2007 and First Community Bank in 2008.