Qatar's Doha Bank will launch an insurance arm in January and expects to tie up an investment banking and asset management venture with a major global bank within six months, its chief executive said on Wednesday.
Chief executive Raghavan Seetharaman told Reuters that Qatar's fourth largest lender by market value was aiming to move from being a local to more global bank, opening offices in the United Arab Emirates, Kuwait, China and elsewhere.
"I foresee 20 to 25% asset expansion next year," he told Reuters in an interview in London, adding that this was a similar rate to 2007.
"We are continuing to grow our asset base in line with the country but the local market is saturated - I cannot expect 20% growth there and that is why I am opening elsewhere. We are a local bank becoming global."
He said that like most of the Gulf financial sector his bank was entirely insulated from the sub prime crisis in the United States, and was poised to take advantage of ongoing high Gulf growth on the back of record oil prices.
"We run a billion-dollar book in terms of investment and it has not impacted on us at all," he said.
Per capita income in the oil-rich state could reach $100,000 in the near future, he said, with the economy diversifying away from being more than 50% energy-based with a growing financial sector also catering to neighbouring countries.
He said the bank would launch an insurance arm on January 7 which he believed would amount for 20% of the institution's business over the next three years.
The bank was in discussions with the government of Yemen to take a 50% stake in the state-owned Credit Agriculture Bank, he said, again with a view to launching an insurance arm, and the deal could be finalised in three to four months, he said.
Doha Bank was also in negotiations with a major international investment bank to launch an investment banking and asset management joint-venture within the next six months, he said, although he would not comment on whether it was an Asian or Western institution.
"We have not contractually signed but it is in the making," he said.
Seetharaman said the bank expected a significant proportion of its expansion to revolve around the growing Islamic bond or sukuk market, which he said was growing at around 200% a year.
Sukuk comply with Islam's ban on lending on interest, with bondholders paid returns from underlying assets - such as rents from real estate - rather than interest payments.
Doha Bank aims to sell a $1 billion sukuk to finance investment in renewable energy next year, using the money for projects such as setting up an exchange for trading greenhouse gas emissions permits.
"We are doing it as a corporate social responsibility project but it is a good business model," he said. (Reuters)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 Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.