08/03/2012 08:13 AST
Al Khaliji Commercial Bank (al khaliji) is preparing the framework for issuing non-convertible bonds up to QR2.73bn ($750mn) that will help the bank participate in Qatar’s infrastructure build-up.
The bank obtained shareholder approval for the bond proposal at its annual general meeting, yesterday.
The AGM entrusted the al khaliji board of directors with the issuance of the non-convertible bonds.
Al khaliji chairman Sheikh Hamad bin Faisal bin Thani al-Thani said the bank would require sufficient capital if it was to support Qatar’s infrastructure projects.
“Many banks are issuing bonds to raise capital,” he said at the AGM.
Al khaliji CEO Robin McCall told Gulf Times: “The bank will tap the debt capital markets at the appropriate time”.
“We remain very liquid, we have sufficient capital now. The capital adequacy ratio is around 23%, which is very good. There is no need to do this in the short-term.”
He said the bank was getting the framework ready with shareholder approval so that it could go to the market and tap it, when required.
McCall said: “Tapping the bond market is good from the bank’s perspective; it provides longer term funding. We want to ensure we have a proper asset-liability match.
“If our strategy is to support Qatar in terms of infrastructure development, we need to have longer term funding. Bonds are a tool for appropriate longer term funding for the bank. On the other hand, deposits are relatively short-term.”
The shareholders also approved distribution of 10% cash dividend to shareholders on the nominal share value, which translates into QR1 per share.
On the unsuccessful bid to merge al khaliji and International Bank of Qatar, Sheikh Hamad said: “The process had reached an advanced stage and we had conveyed this to the Qatar Financial Markets Authority. But it fell through as the evaluation was not acceptable to either of us.
“Agreeing to a lower value would not have been beneficial to our shareholders. We did not complete the merger process when we understood that it would not benefit our shareholders,” Sheikh Hamad said.
Commenting on al khaliji’s plans for 2012, Sheikh Hamad said: “Our aim in 2012 is to continue building our success on our mid-term strategy and growing – organically – while focusing on our core strengths, i.e. the Qatar market, a well-capitalised bank, treasury capabilities, and institutional relationships in corporate and international banking.
“We will continue to build the brand, while maintaining our measured consumer strategy focused on upscale and high net worth individuals. Adding to that, we will pursue our prudent risk management policy in 2012, and focus on our strong risk culture underpinned by sound risk governance processes”.
The bank shareholders have elected a new board of directors for a three-year term from 2012.
The new seven-member board comprises Sheikh Hamad bin Faisal bin Thani al-Thani, chairman and managing director appointed by Qatar Holding, Abdullah bin Nasser al-Misnad, vice-chairman, independent member (Qatar), Mohamed Khalid al-Mana, independent member (Qatar), Abdulsalam al-Murshidi, representative of Nawras Company (Oman), Hisham al-Saei, representative of Union Investment House (Bahrain), Rashid al-Naimi, representative of Qatar Foundation and Saif Mohamad Abdullah al-Midfaa, representative of Qatari Diar.
Gulf Times
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