DUBAI, March 12 (Reuters) - The United Arab Emirates' Sharjah Islamic Bank SIB.AD (SIB) plans to issue convertible sukuk equivalent to 10 percent of the lender's capital, it said on Sunday.

Funds raised through the debt sale will be used by Islamic endowments selected by the government of the emirate of Sharjah.

The bank also authorised a capital increase to 2.67 billion dirhams ($726 million) from 2.43 billion dirhams, it said in a bourse announcement.

(Reporting by Aziz El Yaakoubi and Davide Barbuscia; Editing by Andrew Torchia) ((aziz.elyaakoubi@thomsonreuters.com; +971552994086)(;))