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Thu 17 Mar 2016 01:43 PM

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Qatar's Ahli Bank denies merger plan talks with Al Khalij, IBQ

Sources say Al Khalij Commercial Bank, Ahli Bank and International Bank of Qatar in early discussions

Qatar's Ahli Bank denies merger plan talks with Al Khalij, IBQ
Qatar money, Qatar currency, Qatar finance, Qatar banking, Qatar finance

Qatar's Ahli Bank on Thursday denied it was involved in an "impending merger" with International Bank of Qatar and Al Khalij Commercial Bank .

Reuters reported earlier on Thursday that the trio were in early-stage talks on a merger that could pool assets worth more than $30 billion, citing three people with knowledge of the matter.

Those talks were focused on winning backing from key shareholders at each of the banks, according to one of the sources, an important consideration in a country where state ownership is prominent across the economy and political factors can often supersede other considerations.

"We categorically deny this speculation as baseless and we remain focused on delivering our agreed strategy and serving our customers," Ahli Bank chief executive Salah Murad was quoted as saying in the bourse statement.

Should the merger go ahead, the combined entity would have assets worth upwards of 120 billion riyals ($33 billion), according to Reuters calculations, putting it on a par with Commercial Bank of Qatar, the country's third-largest lender by assets.

Though the negotiations are taking place, and a deal could benefit all three parties, there is no guarantee any agreement will be reached: the last time a bank merger was attempted in Qatar, between Al Khalij Commercial Bank, known as Al Khaliji, and IBQ, it collapsed in June 2011 after more than a year of talks.

Discussions between the trio are at an early stage and no advisors have been hired yet, according to the three people, who spoke on condition of anonymity as the information was private.

Al Khaliji, the largest of the three lenders, is 39.99 percent-owned by the Qatar Investment Authority (QIA) sovereign wealth fund. Ahli Bank is 29.4 percent-owned by Qatar Foundation, a state-owned investment vehicle traditionally focussed on science and education which bought its stake from Bahrain's Ahli United Bank in 2013.

Unlisted International Bank of Qatar has senior Qatari royal family members among its major shareholders, including Sheikh Hamad bin Jassim al-Thani, the former prime minister and head of QIA who serves as chairman of the bank.

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