Qatar seals purchase of bank property investments

Qatar has bought the real estate investments of local banks after earmarking 15 billion riyals ($4.12 billion) to buy their portfolios, the central bank governor said on Thursday.

The government said in May it would offer to buy the bank's property portfolios and loans to support a sector suffering from price declines and guarantee continued growth in the world's top exporter of liquefied natural gas.

"The programme has been implemented, funds have been allocated to eligible banks and payments have been made according to conditions," Sheikh Abdullah Bin Saud Al Thani said, the state-run Qatar News Agency reported.

The governor did not specify how much money has been dispensed, which banks have sold their real estate portfolios or what the terms of the purchases were.

Qatar's government has implemented a slew of measures to shore up liquidity at local banks since the fourth quarter, including buying stakes in lenders and purchasing their local equities investment portfolios.

Banks eligible for the real estate funding include Qatar National Bank, its biggest lender, and eight other banks, including Commercial Bank of Qatar and Doha Bank, the government said in May.

Qatar house prices have fallen as much as 30 percent in the last six months due to the global slowdown, but lingering demand for property will limit price weakness, real estate services company Jones Lang LaSalle said in May.

Like other banks in the world's biggest oil-exporting region, Qatari lenders have taken provisions to guard against an expected rise of bad loans as their economies adjust to a global recession and lower oil prices.

Qatar bank lending fell seven percent in the first two months of 2009 as banks adopted more caution about extending new loans, after more than doubling between 2007 and 2008 during a regional economic boom fuelled by oil prices that peaked at $147 in July. (Reuters)

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