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Mon 26 Mar 2012 10:21 AM

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Privatise Gulf's state-owned lenders - Qatar banker

Head of IBQ said some regions were “overbanked”, need for more consolidation

Privatise Gulf's state-owned lenders - Qatar banker
“These banks are profitable, well managed and do well, so why not privatise them?"
Privatise Gulf's state-owned lenders - Qatar banker

The managing director of one of Qatar’s fastest growing banks has called for an end to state ownership of the region’s lenders, in a bid to open the market up to private investors.

“Some banks continue to be owned by the state. You have some situations in Saudi Arabia and the UAE and even Qatar… I don’t see the reason for the state ownership,” George Nasra, managing director of International Bank of Qatar (IBQ), said in an interview in Doha.

“These banks are profitable, well managed and do well, so why not [privatise them]. Take Saudi Arabia and NCB (National Commercial Bank): it is the largest bank in Saudi Arabia, it is profitable and well managed and still 100 percent owned by the state… why?” he added.

If these state-owned banks were floated on the stock markets they would be a significant boost to the regional bourses and would also “give local investors the chance to invest,” Nasra believed.

In addition to an end to state ownership, Nasra believed it was time for more consolidation in the banking sector, especially in Qatar, where he believed the market was over saturated.

“We believe that the country is over-banked… There are around 18 banks, with the local banks, Islamic banks and the foreign banks, for a total population of 1.7m.

“We estimate that the bankable population is around 600,000, so that is why we think the country is overbanked. Even despite the boom basically. I think it is time for consolidation basically,” he said.

IBQ itself was the focus of a potential merger with rival Al Khaliji Commercial Bank. While the two sides could not agree on a deal, Nasra said he was still open to talking to suitors.

“We disagreed on the valuation unfortunately, but we will continue to look for opportunities. We are open to all alternatives, if it makes sense for our shareholders and the banking industry.”

While the bank is 30 percent owned by the National Bank of Kuwait since 2004, Nasra has ruled out a merger with a large international banking brand as it is aim to keep the bank local and independent. “I don’t think [we’d agree to an international buyout]. We want to be the last surviving entity.”

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