Doha Bank, which is seeking shareholders approval for the acquisition of Indian assets of HSBC Bank of Oman, is also contemplating raising funds of up to $2bn through debt.
In this regard, the bank’s board has decided to convene an extraordinary general assembly meeting in November to issue debt or any other suitable instruments at their discretion using Doha Bank EMTN (euro medium term note) programme.
The issue would be in varying amounts, which would, in aggregate, not exceed the EMTN programme of $2bn with no single deal exceeding $750mn, a bank spokesman said in a communiqué to the Qatar Stock Exchange.
The issue – which could be in various major currencies including the US and Australian dollars, Japanese yen, Swiss franc and Sterling pound – would be of varying maturities not exceeding 10 years for senior debt and 30 years for private placement. It is proposed to issue the debt either by a special purpose vehicle guaranteed by Doha Bank or through the lender itself.
The board of directors also unanimously approved the Scheme of Amalgamation under Section 44A of the Banking Regulation Act, 1949 of India, thereby enabling Doha Bank India to take over and combine the banking business of HSBC Bank Oman, India with its Indian business unit.
The business being acquired consists of two branches and had gross assets of $58mn as on December 31, 2013. HSBC Oman acquired these two branches as part of a merger of Oman International Bank with it.
The move by Doha Bank comes amidst its strategy to have 50% of its total assets from international operations within the next five years.
Doha Bank, which will open a branch in Mumbai, is planning to target the growing retail sector because of the huge opportunities, especially in the electronic banking.
Foreign banks account for less than 1% of India’s total branch network, about 7% of the total banking sector assets and a sizeable 11% of profits as on March 2013.
India’s banking system is dominated by state-owned banks, which accounted for more than two-thirds of the sector’s assets at the end of March 2012, the latest RBI data showed.