QNB increasing capital by 25% via rights issue

31/01/2011 00:00 AST

QNB, the country’s largest lender by assets, is increasing the capital by 25% through a rights issue to part fund its expansion and meet the proposed Basel III norms.

The rights issue, which will be on tap during the second quarter (April-June) of this year, has been priced at QR100 a share (including the QR90 premium), QNB chairman and Finance Minister HE Yousef Hussein Kamal said after the bank’s annual ordinary and extra-ordinary general assembly meeting which approved the 50% cash dividend and 30% bonus shares.

After the rights issue, the capital of the bank would go up to QR6.35bn from the QR5.08bn (including the 30% bonus share for shareholders for 2010).

“This share capital increase (through rights issue) will enable the QNB Group to continue to meet regulatory requirements including the proposed Basel III along with maintaining the current high rating,” Kamal said, adding higher capital base would also enable the bank to expand its geographical operations as well as explore merger and acquisition opportunities.

Kamal said the bank was giving the “final touches” to the next five-year strategic plan through which it aspire to achieve further success and to take QNB forward to become the “leading financial institution in the Middle East, Africa and South Asia.”

Highlighting that QNB had reported a 36% jump in 2010 net profit to QR5.70bn, he said the group “was able to deliver outstanding financial results for 2010, driven by the on-going expansion across the range activities both domestically and internationally along with the continuation of the adoption of a conservative approach to risk management that resulted in further enhancing the group’s leading position amongst financial institutions in the Middle East and North Africa region.”

On the domestic front, Kamal said the bank would come out with new products and services, including the brokerage, which will be introduced in the early 2011.

Assuring shareholders that Qatar’s banking industry is ‘sound and stable’, he said the recent decision by the Qatar Investment Authority to acquire another 10% of the banks’ capital provided the strength to the industry to better partake in the country’s development.

Qatar’s economy continues its strong growth supported by the ongoing expansion in energy related projects and the vast investments undertaken for various developmental initiatives, he said.

Gulf Times