Resources for Basel II Capital Accord (Basel II)

Banks pressured to raise capital

www.business24-7.ae

Bankers here said that most UAE banks – if not all – will increase capital by 20-40 per cent this year. Banks are under pressure to utilise their record 2007 profits to strengthen their capital base according to Basel II requirements.

They are likely to limit their cash dividend payouts to a minimum and opt for bonus shares to their shareholders, analysts said.

Last year banks in the UAE enjoyed strong growth, but as more business is sought and with the new Basel II–based regulation – which would lower capital adequacy ratios by 0.5 to 1.0 per cent – on the verge of implementation, boardroom chatter of how to raise capital, and by how much, continues.

View the Resource

Share or bookmarklet this web page at: