FAB launches Dh15bn discounted rights issue

Modern glass-fronted bank headquarters in UAE financial district, reflecting FAB Dh15bn discounted rights issue

Key Points

01FAB plans to raise up to Dh15bn ($4.08bn) via a rights issue
02Around 1.1bn new shares will be offered at Dh13.52, a 30% discount
03Mubadala, holding 37.9% of FAB, will subscribe in full to its entitlement
04The issue targets growth, higher RoTE above 17% and over Dh50bn dividends

FAB unveils one of Gulf’s largest recent rights issues

First Abu Dhabi Bank (FAB) has announced plans to raise up to 15 billion dirhams (approximately $4.08 billion) through a rights issue.

FAB’s board has approved the proposed capital raise, which is expected to be completed in the first quarter of 2027, subject to shareholder and regulatory approvals. A General Assembly meeting to seek shareholder approval is scheduled for December 7, 2026, after which the final entitlement ratio, eligibility date, rights-trading period and subscription timetable will be confirmed.

Key terms of the Dh15bn capital increase

The bank plans to issue approximately 1.1 billion new shares at a price of 13.52 dirhams per share. The offer price represents a 30% discount to FAB’s closing share price on the Abu Dhabi Securities Exchange on November 10, 2026, providing an incentive for existing shareholders to participate in the transaction.

Under the rights structure, eligible shareholders will be able to subscribe for new shares in proportion to their current holdings, enabling them to maintain their ownership percentage. Shareholders choosing not to exercise their rights may see their stake diluted as the enlarged share capital comes into effect.

Support from Mubadala and advisory line-up

Mubadala Investment Company, FAB’s largest shareholder with a 37.9% stake, intends to subscribe for its full pro-rata entitlement in the rights issue. This commitment provides significant backing for the capital increase and helps underpin demand for the new shares.

FAB will act as lead manager, bookrunner and sole receiving bank for the transaction. J.P. Morgan has been appointed as financial adviser, while Allen Overy Shearman Sterling will serve as legal adviser, supporting the execution of the offering and associated regulatory processes.

Strategic use of proceeds and financial targets

FAB plans to deploy the proceeds to expand lending and investment across domestic and international markets, and to deepen client relationships. The bank has highlighted planned investments in strategic capabilities, including technology and artificial intelligence, as part of its broader growth strategy.

Alongside the rights issue, FAB has raised its profitability ambitions, targeting a return on tangible equity above 17% through the economic cycle, compared with prior guidance of more than 16%.

Balance sheet context and shareholder implications

Its shares have gained 10.6% so far this year, reflecting investor confidence ahead of the planned capital raise.

The rights issue offers existing shareholders an opportunity to participate in the bank’s expansion while preserving their proportional holdings if they take up their full allocation. Those who fully subscribe can benefit from the discounted offer price, while the enlarged capital base is intended to support FAB’s role in financing growth opportunities in the UAE and across its international network.

Key Takeaways

01FAB is pursuing a sizeable Dh15bn rights issue at a 30% discount to reinforce its capital base and fund domestic and international expansion.
02Strong support from Mubadala, which holds 37.9% of FAB and will subscribe in full, anchors the offering and reduces execution risk.
03The capital raise is tied to more ambitious financial targets, including RoTE above 17% and over Dh50bn in planned dividends, while maintaining robust capital ratios.

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