Sharjah makes enhanced offer for struggling Invest Bank

The Government of Sharjah had planned to take a 50.07 per cent stake in the bank.

Sharjah-based Invest Bank on Sunday said it had received an enhanced offer from the emirate’s government. The general assembly will evaluate the offer at its next meeting in January 2019.

“At the Invest Bank general assembly held on December 29, shareholders voted unanimously to adjourn the meeting until Tuesday, January 8, in order to consider an enhanced offer from the government of Sharjah as a proposed strategic investor,” the lender said in a statement posted on the Abu Dhabi Securities Exchange, where it is listed.

The Sharjah government had earlier offered to buy a strategic stake for Dh1.9 billion to bail out the struggling bank. The lender, however, did not reveal the new enhanced offer made by the Sharjah government.

Barclays is advising Invest Bank for the fund-raising programme and HSBC is advising the Sharjah government.

The UAE Central Bank had said that it was closely monitoring and working with the Sharjah government to develop a plan to strengthen the lender’s capital base. The apex bank said it would provide “all the available liquidity facilities, which remain at Invest Bank’s disposal, if and when needed.”

The UAE central bank had asked Invest Bank to book provisions worth Dh2.199 billion which would have wiped off its equity worth Dh2.154 billion.

In September, Invest Bank chief executive Sami Farhat stepped down after the lender slipped into the red in the second quarter of 2018 due to increase in net impairment losses.

Hit by a huge jump in net impairment losses, the lender posted a Dh136.5 million loss as compared to Dh88.27 million profit for the same period last year. In the first half of 2018, it posted a Dh71.8 million loss as compared to Dh177.9 million profit in first half of 2017. Its net impairment losses grew from Dh61.9 million in Q2 2017 to Dh234.9 million in Q2 2018. First half net impairment loss reached Dh290 million from Dh97 million during the comparative period.

— waheedabbas@khaleejtimes.com

• Sharjah