Dubai: The Central Bank of the UAE (CBUAE) has announced its support for the Invest Bank with all available liquidity facilities as the bank is trying to get fresh capital infusion.
In a news statement on Sunday, the bank said it is closely monitoring Invest bank’s financial developments for some time and has been working with the bank and the Government of Sharjah to develop a plan to strengthen its capital base.
On Friday the bank said in a statement that its board of directors will recommend to its shareholders the injection of capital by the Sharjah government as a majority strategic investor in the bank.
While the formalities for Sharjah government’s acquisition of a strategic stake in the bank, the central bank said it will extend support to the bank with liquidity, which remain at Invest Bank’s disposal; if, and when, needed.
“In this regard [acquisition of equity], the Government of Sharjah, is firmly committed to support the bank via a direct equity investment and this plan will be presented at the bank’s AGM scheduled for the 29th December 2018 for approval,” the central bank said in a statement.
Invest Bank has been hit by recent high levels of non-performing loans (NPLs), partly due to its exposure to the troubled real estate and construction market. The lender, currently 15.5 per cent owned by Sharjah-based International Private Group.
“Invest Bank and the government of Sharjah consider that the latter’s injection of capital is the best option to enable the bank to continue to grow and prosper,” the bank said in an emailed statement.
The investment by Government of Sharjah is subject to regulatory and shareholder approvals.