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Bahrain’s ABC bank plans $1.1 b capital increase

MANAMA - Bahrain-based Arab Banking Corporation said on Wednesday it plans to increase its capital by $1.11 billion to finance its Middle Eastern growth strategy and make acquisitions.

It said the capital injection from its existing shareholders would bring its capital to $3.11 billion.

“Expansion by way of an acquisition is also not excluded, as and when the right opportunity presents itself for a suitable target with a significant retail footprint in the (Middle East and North Africa,” it said in a statement.

It said it will hold an extraordinary shareholders meeting on Jan.28 to seek shareholders’ approval. Kuwait, Libya and Abu Dhabi own about 30 percent in the bank each.

ABC has previously said it is trying to diversify away from wholesale banking, such as loan markets and project finance, to improve its funding basis by including retail banking.

It said on Wednesday it is considering new operations in countries such as Syria and Libya.

ABC was one of the banks in the GCC that invested in U.S. subprime papers and cleaned its books last year. It had to shore up its capital by a $1 billion rights issue in June 2008 after steep losses during the first two quarters of that year.

It returned to profit in 2009.