Business: Doha Bank… to raise QR1.5bn

Doha Bank is aiming to raise up to QR1.55bn through its rights issue, which will hit the market next week.

Doha Bank board members outline to shareholders the need for raising capital by 50% through domestic rights and GDR issues

The bank, which has embarked on an expansion drive, is issuing 51.67mn shares at QR30 (including a premium of QR20 a piece) in the first phase; while the second phase will see the lender issue global depositary receipts (GDRs).

The board proposals to raise the capital in twin phases were yesterday approved at the annual general assembly where shareholders also gave nod to 45% cash dividend for 2012.

The capital increase has been necessitated in order to achieve the “strategic” goals at the local, regional and international levels, strengthen the lending capacity, improve the competitive edge and realise the highest levels of performance, said Doha Bank chairman Sheikh Fahad bin Mohamad bin Jabor al-Thani.

It also comes as part of the bank’s three-year strategic plan, which includes some amendments on business strategy especially with regard to the activities of overseas branches and representative offices.

The bank, with assets of more than QR55bn as on December 31, 2012, will issue new shares to the existing shareholders, who are registered with the Qatar Exchange, at the close of business on February 19, 2013.

The domestic rights issue, which constitutes 25% of the current paid-up capital, will begin on February 28 and close on March 13.

In the second phase, the bank — which reported 20.6% and 2.42% returns on average shareholders’ equity and average assets respectively at the end of 2012, will go for another increase of up to 25% through the issue of new shares, in the form of GDRs, to be held by a depositary bank.

The GDRs, which will be offered to international investors residing outside Qatar after obtaining the approval of the concerned regulatory authorities, will be subsequently listed on the London Stock Exchange.

The share price, including premium, should not be less than 90% of the market price of the company’s ordinary shares as traded on the Qatari bourse at the date of issue, which would be determined later.

The implications of the global financial crisis still exist, and the economies of the European Union countries are still facing great difficulties, in addition, the political events experienced in the Middle East led to a slowdown in the economies of various countries across the globe including the economies of the developed countries, forcing some of those countries to make economic reforms to exit from crisis, according to Sheikh Fahad.

“We, as bankers, must be very cautious because the financial markets in this region would be unpredictable if other disasters occurred in due course,” he said.

However, despite of all these events, “we are optimistic about the future where we anticipate that Qatar will witness exceptional booming in all economic sectors and subsequently launching of many development projects in the coming years, that will reflect positively on the performance of the banking industry in Qatar in general and of Doha Bank in particular”, he added.

The future plan of the bank includes implementation of an effective risk management strategy at both the local and international levels, recruiting Qatari nationals, enhancing the levels of staff performance by recruiting highly experienced and qualified human resources, improving the banking services’ delivery channels, upgrading the level of corporate governance in the bank, diversifying its income sources and strengthening its financial position with a view to achieving the highest level of effective operational performance, Sheikh Fahad said.

At the annual general assembly meeting, Al Khaleej Takaful group, represented by Khalid Abdul Aziz al-Baker was elected by acclamation as a new member of the board to replace a member who resigned.

The meeting also endorsed the appointment of Ernst and Young as external auditors for 2013.

Source: Caye Global News, Gulf Times

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