March 2009 Two more Abu Dhabi banks have taken steps to keep pace with their rivals during the credit crunch by tapping the Ministry of Finance Ministry of Finance for funding to convert to capital. First Gulf Bank First Gulf Bank and Abu Dhabi Islamic Bank Abu Dhabi Islamic Bank both took the plunge with the ministry, with the former securing dhs4.5 billion ($1.23 billion) which it plans to convert to Tier 2 capital, and the latter signing up for a dhs2.2 billion in 'emergency government deposits' which it will also be converting into regulatory capital. "The bank got dhs4.5 billion in two tranches of dhs2.2 billion and dhs2.3 billion and a decision has been taken to convert it into Tier 2 capital," a senior bank executive from First Gulf First Gulf said, adding that shareholder approval had been secured. "The bank's capital adequacy ratio will now be slightly higher than 21 per cent. Higher CAR means higher lending and investing capacity," said the bank's spokesman. Abu Dhabi Islamic Bank Abu Dhabi Islamic Bank , meanwhile, yesterday confirmed it had secured dhs2.2 billion ($599 million) in emergency government deposits, following similar moves by rivals. "The entire amount will be converted into capital," Tirad Mahmoud, chief executive of ADIB ADIB , said. "Our rationale was simple. If we don't follow suit, other banks may optically look better capitalised," he said. ADIB ADIB and First Gulf First Gulf became the fourth and fifth banking institutions to announce the securing of governmental finance after the National Bank of Abu Dhabi National Bank of Abu Dhabi and Abu Dhabi Commercial Bank Abu Dhabi Commercial Bank landed dhs5.6 billion and dhs6.6 billion, respectively, for conversion to regulatory capital. Union National Bank Union National Bank following suit with dhs3.2 billion in funding.

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