Qatar's CBQ seeks to raise $549m

Commercial Bank of Qatar Q3 eyes bond sale as net profit falls 48% to $77m

Commercial Bank of Qatar (CBQ) plans to raise QR2bn ($549.3 million) through a bond sale in December to help replenish capital reserves depleted by its acquisition of a majority stake in a Turkish lender.

The announcement on Wednesday came as CBQ, Qatar's third-largest bank by assets, reported a 48.7 percent slump in third-quarter net profit on higher loan provisioning, widely missing the average forecast of analysts.

The bank, like many lenders in the Gulf Arab region, has looked to offset increased competition in its domestic market with foreign expansion.

CBQ bought 70.84 percent of Turkey's Alternatifbank in July, and added a further 3.4 percent through a public tender in September.

Analysts had warned even before the purchase was finalised that CBQ would have to raise reserves to enhance a capital adequacy ratio which, while high by Western standards, put it among the lowest in Qatar.

CBQ's total capital adequacy ratio - which includes Tier 1 and 2, or core and supplementary, capital - fell to 12.5 percent at the end of September from 17 percent at the end of 2012 on the back of the Turkish acquisition and higher lending, CBQ said in its earnings statement on Wednesday.

The perpetual bond sale, which must be approved by shareholders and the regulator, will boost the bank's capital ratio by 2.2 percentage points, a separate statement said.

Perpetual bonds, which have characteristics of both debt and equity, have become a popular tool for Gulf banks to raise capital - three lenders in the United Arab Emirates have done so in the last year.

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