We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Tue 22 Jan 2008 08:07 AM

Font Size

- Aa +

Qatar's CBQ sees shares nosedive

Commercial Bank of Qatar's stock plunges 8.2%, biggest faller in Qatar's main index amid selloff.

Shares of Commercial Bank of Qatar (CBQ), the country's second-largest lender, suffered their biggest one-day decline in at least two years on Monday after the bank reported 2007 earnings and plans to sell shares to fund growth.

The stock - which almost doubled last year - plunged 8.2%, the biggest faller in Qatar's main index amid a selloff that saw the benchmark fall the most in a single day in 18 months.

Commercial Bank's net income in the three months to December 31 rose to 380 million riyals ($104.5 million), compared with 224.33 million in the year-earlier period, newswire Reuters calculated, based on full-year results and previous financial data.

The bank will offer shareholders a 40% cash dividend and 30% in bonus shares, the lender said on the Qatari bourse website.

"Shareholders expected that it would give more dividends," said Bashar Issa, an analyst at Doha, Qatar-based Dlala Brokerage & Investment Holding, which forecast in a Reuters survey last month that Commercial Bank would make a fourth-quarter profit of 350 million riyals.

Full-year net income jumped 61% to 1.39 billion riyals, said the bank, which plans to sell 3.83 billion riyals of stock to existing shareholders to finance acquisitions in the Gulf. It did not give quarterly net data.

"We're looking for alliances and partnerships by seeking strategic stakes," chief executive Officer Andrew Stevens told Reuters by telephone in Doha, saying the bank was focused on the Gulf including Saudi Arabia, Kuwait and Bahrain.

Commercial Bank owns 35% of National Bank of Oman - which it also manages - and last month increased its stake in Sharjah-based United Arab Bank to 34.7%.

The Qatari lender plans to sell 38.26 million shares in a rights issue in two phases in the second and fourth quarters, raising its share capital 21% to 2.205 billion riyals, the lender said.

The first capital increase will go towards paying back an $800 million loan the bank secured in November to finance its acquisition in United Arab Bank, Stevens said. The second phase will help finance acquisitions, he said, declining to be more specific.

The lender also plans to add as many as 12 branches to its network in Qatar during the next 12 to 18 months, including four before April, Stevens said.

"We're looking for further retail expansion and increasing our market share in Qatar," Stevens said. "The Islamic side of the business is an area of focus."

Full-year net interest income rose 29.7% and fees and commissions increased 72.5%, Qatar daily the Peninsula newspaper reported earlier on Thursday, citing the bank.

The bank made 1.01 billion riyals in the first nine months of last year, according to previous financial statements. (Reuters)

Arabian Business: why we're going behind a paywall