- Special Pages
By Nasser Al Harthy
DOHA: The merger between al khaliji bank and International Bank of Qatar (IBQ) is on track and the deal is expected to be concluded this year, IBQ’s Managing Director told reporters here yesterday.
“The merger is progressing very well and we are working on several tracks, one of which is integration of both operations, the second one being the second phase of due diligence and final phase of due dilligence,” George Nasra told a news conference on the sidelines of the Meed Qatar Projects 2011 which opened here yesterday.
“Things are going well, but it is a complex operation and is subject to Qatar Central Bank (QCB) and Qatar Financial Market Authority as well as the general assemblies of both banks and boards of directors’ final approval. But the merger operations are progressing very well.”
Nasra also did not think the QCB directives to close Islamic branches of commercial banks will delay or postpone the merger process. “The Islamic banking facilities or operations at both banks are recent. So I don’t think it is a major factor or even a factor in the continuation of discussions and negotiations on the merger,” he said. He said he do not think the decision will affect projects financing activities as “the banking sector is very well capitalised, liquid and profitable, both the Islamic side and the conventional side,” he said. “As a matter of fact I would say that the banking sector is over capitalised to finance the development needs of the country, including the Fifa World Cup projects.”
He added that IBQ is committed to comply with all QCB regulations and directives, but pointed out that all commercial banks with Islamic branches will be affected to varying degree depending on the size of their Islamic banking activities. “But as far as IBQ is concerned, the effect on assets and bottom line will be minimal because our Islamic banking activities started only two years ago, so it is very young,” said Nasra.
Asked about an estimate of the size of investments in the sector, he said “It is difficult to give an estimate, because the size of the Islamic banking activities vary from one bank to another. Some of these banks have been operating Islamic banking activities over the last 10 to 15 years, some of them recently, some of them have 20 branches, other single branch.”
And what comes next is that one of the options being considered is that commercial banks could sell their Islamic banking business to Islamic banks, where they They could be sold either as assets or as business, including branches, staff etc, Nasra said.
Earlier addressing a panel session at the conference entitled ‘An in-depth look at the current economic developments and financial landscape in Qatar’, Nasra said Qatar is now the fastest growing economy in the world with a projects pipeline which will see a significant surge in project financing and construction over the next 10 years.
“With a population that is expected to double and a GDP which will reach $ 221bn in 2015, Qatar is poised to set a historic global growth benchmark with investments topping $100bn in infrastructure, real estate and other non-energy sectors that are set to fuel-charge the country’s expansion schemes,” he said.
The 2011 edition of Meed Qatar Projects 2011 Conference, focusing on significant projects in energy and non-energy sectors and the line-up of projects stemming from the World Cup in 2022 to be hosted by Qatar, also marks IBQ’s third successive year of association as Platinum Sponsor of the event.