Sharjah Islamic Bank opts to split dividend

Sharjah Islamic Bank said on Monday it would split its dividend to 5 per cent cash and 5 per cent stock rather than cut a previously proposed 10 per cent cash dividend.

Chief executive Mohammed Abdullah said the move was an effort to abide by recently issued central bank guidelines that put a cap on cash dividends to 50 per cent of annual profits.

Annual earnings rose to Dh260.1m ($70.83m) from Dh231.6m in 2008.

Had the bank issued a full cash dividend, it would have constituted 88 percent of profit.

Abdullah, speaking at the company's annual general meeting, said he had promised shareholders a cash dividend of 10 per cent of the par value of shares, or Dh231m in total. To keep that promise the company chose to split its dividend.

Citing the same central bank guidelines, Sharjah-based United Arab Bank reduced its cash dividend to 15 per cent in February from a previously proposed 22 per cent.

Sheikh Sultan bin Mohammed al-Qassimi, crown prince of Sharjah and chairman of Sharjah Islamic Bank, said the bank was able to weather the financial storm last year by restructuring its mortgage policies and improving its corporate governance and risk management.

Assets of the bank climbed almost 3 per cent to Dh16bn at the end of 2009.