Font Size

- Aa +

Mon 7 Mar 2011 04:08 PM

Font Size

- Aa +

Qatar's QIIB sees Islamic bond sale in 2011

Qatar International Islamic Bank may consider buying Islamic assets of traditional banks

Qatar's QIIB sees Islamic bond sale in 2011
ISLAMIC BANK: Qatar International Islamic Bank (QIIB) may issue an Islamic bond, or sukuk in 2011

Qatar International Islamic Bank (QIIB) may issue an Islamic bond in
2011 after receiving shareholder approval for sukuk issuance last week, the
bank's deputy chief executive said on Monday.

"The issue is probably going to happen in Qatar this year," Mohsen
Moustafa said on the sidelines of a conference in Dubai, adding that any
issuance would depend on market conditions.

QIIB received approval from its shareholders earlier in March to issue
Islamic bonds to boost capital, if required.

The Qatari lender is one of four Islamic banks in Qatar expected to benefit
from the Qatar central bank's move to abolish Islamic banking branches at conventional
banks by the end of the year.

Moustafa said the bank is considering buying the Islamic assets from QIIB's
conventional counterparts but no decision has been made yet.

"It is one of the issues that has been raised, we will consider
it," he said. "There hasn't been enough time to discuss all the
options."

Moustafa added that the bank would look towards any guidance provided by the
central bank to determine how to proceed with the asset purchase.

The central bank has provided no clear guidance yet on what conventional
banks will need to do with their Islamic operations, although analysts expect
the banks to either sell the assets to Islamic lenders or set up standalone
Islamic subsidiaries.

Moustafa said the directive would be both a challenge and opportunity for
Islamic banks.

"It will be interesting to see how these banks rise to the challenge
and start improving their services and diversification of available products to
the customers," he said.

Moustafa said the company is also focused on expanding domestically and any
expansion outside of the Gulf Arab state will be done through "strategic
alliances."

In July, QIIB said it would raise its stake in Islamic Bank of Britain to 81
percent by buying new shares.