The Islamic Arab Insurance Company, also known as Salama, has announced a strategic financial maneuver aimed at stabilizing its financial health. The company, which operates under the principles of Islamic Shari’a, is set to decrease its capital by a substantial AED 456,567,815. This decision comes as part of a broader strategy to address the accumulated losses that have been impacting the company’s balance sheet.

In a press release dated December 30, 2025, Salama outlined the measures approved during the General Assembly Meeting held on October 16, 2025. The capital reduction will be executed by extinguishing all accumulated losses amounting to AED 443,861,155. This will involve the cancellation of 439,737,326 shares on a pro-rata basis and the utilization of AED 4,123,829 from the statutory reserve to offset the remaining portion of these losses.

This move is a significant step for Salama, as it aims to strengthen its financial position and improve shareholder value. The reduction in capital is expected to enhance the company’s financial ratios, making it more appealing to potential investors and more resilient in the face of market fluctuations.

For investors, this capital reduction could be seen as a positive sign, indicating that the company is taking proactive steps to manage its financial challenges. However, it also means a reduction in the number of shares, which could impact share value in the short term. Therefore, investors should consider the potential risks and rewards before making any decisions.

Given the current scenario, the recommendation for investors would be to hold their positions. While the capital reduction is a step towards financial stability, the long-term effects on the company’s performance remain to be seen. Investors should closely monitor Salama’s financial reports and market conditions to make informed decisions.