QNB plans $1.2bn stock sale

Like other Gulf Arab lenders, QNB is expanding abroad as competition at home intensifies.

Qatar National Bank (QNB), the country's largest lender, said on Wednesday it plans to sell new stock, increasing its share capital to finance regional and local expansion.

The sale could raise about 4.38 billion riyals ($1.2 billion), according to Reuters calculations.

QNB, which is 50% owned by the Qatari government, will sell one share for every eight outstanding in the fourth quarter at 120 riyals each, and one share for every 10 outstanding in the second quarter at the same price, the bank said in a statement.

The bank had 162.22 million shares outstanding on July 12, according to Reuters data.

That would imply it aims to sell 20.28 million shares in the fourth quarter for about 2.43 billion riyals ($667.9 million), and 16.22 million shares in the second quarter for 1.95 billion riyals.

The bank also said it plans to offer shareholders a dividend of 5 riyals per share from 2007 earnings and one share for every five held.

Like other Gulf Arab lenders, QNB is expanding abroad as competition at home intensifies.

Earlier this month, it said it agreed with partners to set up a bank in Syria, the latest Gulf lender interested to enter the country since Syria opened its banking market to foreigners three years ago.

In July, QNB took over the Qatar government's shares in Jordan's second-biggest lender, paying $442 million for the 20.6% stake.

The sale makes QNB the biggest shareholder in Jordan's Housing Bank for Trade & Finance, replacing the state-owned Qatar Investment Authority.

The acquisition was QNB's first since 2004 when it bought British wealth manager Ansbacher Group for 135 million pounds from South Africa's FirstRand.

QNB's second-quarter profit rose 12% to 552.6 million riyals, in the middle of a range of forecasts in a Reuters survey of analysts.

By contrast, Commercial Bank of Qatar, the country's second-largest lender by market value, posted record profit in the second quarter spurred by higher lending, fees and commissions.

Shares of Commercial Bank were up more than 26% this year to Tuesday's close, outperforming the index by more than 16%. Shares of QNB, by contrast, were up 12.9%, 4.45% more than the index.

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