Ahli United Bank’s AGM Approves 5% Cash Dividend and 5% Bonus Share Issue
Ahli United Bank B.S.C held its Annual General Meeting (AGM) and its Extraordinary General Meeting (EGM) on Wednesday, 31 March 2021. The meetings were held virtually due to COVID-19 in compliance with the relevant health directives. The representatives of the Central Bank of Bahrain, Ministry of Commerce, Industry & Tourism of the Kingdom of Bahrain, and Ernst & Young were in attendance.
The AUB AGM approved the recommendation by the Board of Directors to distribute cash dividends for 2020 at 5% of par value (US 1.25 cents per ordinary share), totalling US$ 120.6 million in cash, together with a bonus share issue of 5% of the issued capital (one share per 20 ordinary shares), as well as the transfer of US$ 284.4 million as retained earnings for the next year in support of the Bank’s capital and funding base. The Bank’s shareholders further ratified the decision to reduce the number of board members from ten to the current level of nine, in addition to the reappointment of the Sharia Advisory and Supervisory Board overseeing the group’s Sharia compliance activities for a new term of three years, ending on 31 March 2024 and expressed their deep appreciation for their efforts and contribution.
Upon the AGM’s closing, the EGM was convened and approved the increase of an authorised capital from US$ 2.5 billion to US$ 3 billion, and the increase in issued and paid-up capital arising from the issuance of new bonus shares totalling 482,594,435 shares. The EGM further approved the extension, for a further two years, of their standing authorisation for the Board of Directors to decide on the timing, pricing and other terms of issuance of up to US$ 4 billion in bonds, loans, and other subordinated or capital equivalent financial instruments, as deemed necessary, to support the funding and capitalisation requirements of the AUB Group.
Commenting on the Bank’s performance over the past year, Chairman, Mr Meshal AbdulAziz Alothman said: “Throughout 2020, the world witnessed a major global health crisis that continues to have a high human cost and enormous economic repercussions. In the GCC, this was exacerbated by oil prices plummeting to their lowest levels in decades, which doubled the shock to the markets and has had a deep negative impact on various economic activities and sectors. The banking sector was not an exception.”
“Despite these unprecedented challenges and the general or partial closures that continued for long periods in our markets, the Bank was able to overcome the ramifications of the crisis, ending this unusual year with a net profit of US$ 452.2 million, driven by operating revenue streams from our major markets that totalled over US$ 1.1 billion. It is worth noting that these profit levels are among the best compared to other regional banks for the year 2020, and have provided the necessary support for the Board of Directors’ recommendation to distribute 5% in cash dividends and 5% in bonus shares, continuing our uninterrupted track record of dividend distributions to our shareholders for the past twenty years. Our dividend payout decision also took fully into account the need for strengthening our capital and funding base going forward”, he added.
Mr Alothman also pointed out that the Bank is reaping the rewards of its prudent policies over the years, together with the flexibility guaranteed by its business model based on diversifying markets and service platforms, assisted by its accumulated expertise and experience in efficiently managing crises. As a result, the Bank’s total assets stayed above the threshold of US$ 40 billion, with little change from 2019, supported by stable customer deposits of more than US$ 25 billion, forming the cornerstone underpinning a high-quality financing portfolio of more than US$ 20 billion. This was supported on a solid capital base of shareholder equity that remained above the US$ 4 billion mark as at the end of 2020.
The Chairman emphasised that today – a year from the onset of the crisis – the Bank is in a strong position, and continues to take all measures and preparations that take into account multiple scenarios and variables of the crisis to mitigate identified and potential risks. The Bank is also steadily moving forward in the implementation of its comprehensive transformation plans, which aim to resume growth on a firmer and more diversified foundation and at a sustainable pace as soon as the operating environment normalizes.