Al Khaliji and IBQ merger to create Qatar’s third largest bank

New entity to focus on retail banking and financing development projects
Al Khaliji and IBQ merger to create Qatar’s third largest bank
Al Khaliji, listed on the emirate’s stock exchange, is Qatar’s sixth largest bank by market value.
By Gavin Davids
Fri 24 Dec 2010 04:05 PM

The merger between Al Khaliji Bank and International Bank of Qatar will create Qatar’s third largest bank in terms of capitalisation, IBQ’s managing director said.

Negotiations between the two lenders are in the final stages and the deal is expected to be completed by the first half of 2011, managing director George Nasra told Arabian Business.

He said: “It [the new entity] will have enough capitalisations to provide it with a strong landing capacity and to attract quality executives. It’ll definitely create lots of revenues and co-synergies.”

And added: “Our two track strategies are: corporate banking with an emphasis on financing development projects and continuing with retail banking, but focusing on… affluent and upscale segments.”

Al Khaliji, listed on the emirate’s stock exchange, is Qatar’s sixth largest bank by market value.

The new lender is expected to be listed on Qatar’s stock exchange, which Nasra described as a “very positive step”.

Nasra said that IBQ had reported a net profit in excess of $123.5m for 2010, and that he estimated the bank’s budget was on course to grow by 25 percent in earnings for the next year, without factoring in the merger.

The figure may need to be revised in the wake of Qatar’s surprise win of the 2022 FIFA World Cup, which is expected to impact favourably on the emirate’s banking sector. 

Qatar has pledged to spend around $100bn on a string of mega-projects to overhaul the country’s infrastructure ahead of the games.

Pipeline projects include a $25bn metro and rail network and the $4bn much delayed Qatar-Bahrain causeway.

National Bank of Kuwait this week said the massive infrastructure spend would bolster banking revenues through balance sheet growth and increased fee generating businesses.

Nasra said: “What it means for banks is two things, firstly, on the corporate side, it increases demand on credit facilities to finance projects.”

And added: “On the retail side, it means an influx of expatriates, which means a stronger demand on retail products like consumer loans, credit cards and vehicle loans.”

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.