Dubai Islamic Bank that its AED3.2bn rights issue was three times oversubscribed. The UAE’s largest Islamic bank received nearly AED9bn in subscriptions. We expect DIB’s CET1 ratio to rise c230bps post rights (as of 1Q16 CET1 was 9.3%). We believe the rights issue will enable DIB to maintain above-sector-average loan growth (recapitalised balance sheet to enhance lending capacity) and its pay-out at c60% and comply with more demanding capital requirements. That said, we are concerned by the weakness in spreads and retail credit quality in 1Q16. We expect DIB’s ROE to ease to 21% in 2016 from 27% in 2015 owing to the capital increase, pressure on spreads, and higher provisioning. (Bloomberg, Shabbir Malik, Murad Ansari)   Dubai Islamic Bank: AED5.13 as of 26 June, Rating: Neutral, FV: AED5.80/share, MCap: USD6,908mn, DIB UH / DISB.DU