Barwa Bank, Ibq Merger to Boost Qatar's Banking Sector
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EU ups pressure on Facebook www.facebook.com/QatarTribune over consumer rules www.youtube.com/QatarTribuneChannel PAGE 12 www.twitter.com/Qatar_Tribune FRIDAY, SEPTEMBER 21, 2018 DOW 26,655 QE 9,766.33 SENSEX 37,121.22 GOLD 1,210.30 Turkey slashes growth forecasts +249.24 PTS -39.07 PTS -169.45 PTS +0.17% for 2018, 2019 PAGE 12 PRICE PERCENTAGE PRICE PERCENTAGE 14.29 BRENT 78.67 -0.92% WTI 70.77 -0.49% SILVER +0.07% Barwa Bank, ibq merger to boost Qatar’s banking sector: Moody’s The merger would help to rebalance the Qatari banking sector, where currently 18 banks serve a population of 2.6 million SATYENDRA PATHAK ease these pressures, , the re- DOHA Key merger port said. The consolidation would THE merger agreement be- O The merger will create also modestly balance the tween Qatari lenders Barwa the ninth-largest Islamic competitive pressure on de- Bank and International Bank posits in Qatar’s concentrated of Qatar (ibq) will be beneficial bank in the GCC and depositor base. for the banking sector in Qa- Moody’s would expect it to While the merger re- tar, Moody’s Investors Service benefit from the growth of mains subject to approval by has said in its latest report. Islamic assets across the the relevant authorities and According to the report, Gulf region the banks’ shareholders, the the merger is a positive sign report said, if approved it for Qatari market where in- O The merger could would likely be effective by tense competition has affected modestly ease rising early 2019. profitability of banks. funding costs and modestly Once completed, the surviv- The merger would help balance the competitive ing entity will be called Barwa to rebalance the Qatari bank- pressure on deposits in Bank. It will have total assets of ing sector, where currently 18 Qatar’s concentrated around QR80 billion ($22 bil- banks serve a population of depositor base. lion) post consolidation. 2.6 million. Competition for deposits Successful consolidation While it is too early to as- would marginally ease the sess the overall impact on the has pushed banks to pay pressure on rising borrowing merged banks, Moody’s said, more, driving up their costs, the report said. it expect the new entity could funding costs. “The enlarged bank would face considerable integration have a diverse financing and challenges. O The merger of two depositor profile. The merger “The final structure and domestic banks, while only would strengthen the busi- strategy of the enlarged bank is a small first step, would ness proposition of the com- as yet unknown, but it is likely help to ease intense bined entity given the indi- to alter the group’s overall risk competition and profitability vidual segmental strengths of profile, both in terms of solven- pressures the merged banks,” the report cy including capital and prof- said. itability and liquidity includ- Barwa has a solid consum- ing liquid assets and access to er and corporate business and funding,” the report said. loan market and the smaller ibq which also has a strong “The merger will create the banks compete for the remain- corporate business is a niche ninth-largest Islamic bank in ing lending opportunities has player in private banking. the Gulf Cooperation Council driven intense price competi- The expanded capital base After merger, the new entity will have total assets of around QR80 billion post consolidation. (GCC) and we would expect it tion, resulting in pressure on of the merged entity would to benefit from the growth of loan yields and profitability. also enable it to participate in port said, a merger of local home market. has large deposits from private Barwa and ibq had been Islamic assets across the Gulf The merger that would larger syndicated loans some- banks is a relatively less risky “In common with their do- banking as its main funding part of an earlier process region,” it said. create the third largest Is- time regionally as well, thus inorganic growth strategy un- mestic peers, both Barwa and source. As a result, the com- alongside a third lender Mas- The structure of the Qatari lamic bank in Qatar and the providing some geographi- like some of their Qatari peers IBQ display a concentrated de- bined entity’s depositor profile ref Al Rayyan to merge three banking sector where Qatar sixth largest Qatari bank with cal diversification, the report who have expanded inter- posit base. While ibq has con- would be more diverse than is banks, but the deal collapsed National Bank has an out- a 5 percent market share of said. nationally into jurisdictions siderably less reliance on de- the case for the individual en- in June after 18 months of sized share of the domestic domestic loans would help to At the same time, the re- which are riskier than their posits from the government, it tities,” the report said. talks. Quick read Qatari real estate Oil drops as Trump calls trading volume Lord Mayor of London crosses QR289 mn THE trading volume of registered on OPEC to lower prices real estates stood at QR289.32 visits QFC, discusses million during September 9-13 period, data released by the OPEC monopoly must get prices down now!, Trump tweets Ministry of Justice’s Real Estate potential collaboration Registration Department shows. REUTERS The department’s weekly report NEW YORK said that the trading included TRIBUNE NEWS NETWORK empty lands, residential units, OIL prices eased on Thurs- DOHA multipurpose buildings, resi- day, slowing an upward surge dential buildings and multipur- that had pushed the market LORD Mayor of the City of pose empty lands. Most of the toward four-year highs, after London Charles Bowman vis- trading took place in Al Rayyan, US President Donald Trump ited the Qatar Financial Centre Doha, Al Wakra, Umm Salal, Al called on OPEC to "get prices (QFC) headquarters in Doha Khor, Al Daayen, Al Thakhira and down now!" on Thursday. Al Shamal. (QNA) Brent crude oil was down During the visit, the Lord 50 cents at $78.90 a barrel on Mayor of the City of London Thursday. US light crude was met with senior QFC officials 4 GE power turbines down 9 cents at $71.03 a barrel including Chief Marketing & shut down in US due after rising nearly 2 percent on Corporate Communications to blade issue Wednesday. Officer Sarah al Dorani, Chief Global benchmark Brent Commercial Officer Raed al GENERAL Electric (GE) said on has been trading just below Emadi, and Managing Direc- Thursday that four of its new flag- $80 a barrel, near its high- tor at Financial Sector Office ship power turbines in the United est in almost four years, on Henk Jan Hoodeendoorn, States have been shut down expectations that US sanctions US President Donald Trump. QFC said in a statement. due to an “oxidation issue” and against Iran, OPEC's third warned it expects the problem biggest producer, will reduce OPEC monopoly must get chief commodities analyst to affect more of the 51 units global supply. prices down now!" Bjarne Schieldrop. "But this it has shipped, sending shares "We're stuck in a range "We protect the countries is likely going to break very lower. The giant machines form here," said Tariq Zahir, man- of the Middle East, they would soon." the beating heart of billon-dollar aging member at Tyche Capital not be safe for very long with- US sanctions on Iran's The Qatar Financial Centre headquarters in Doha. electricity plants around the Advisors in New York, with out us, and yet they continue oil exports come into force QR140 bn world. Analysts consider GE’s prices supported by sanctions to push for higher and higher on November 4. Many buy- "The meeting was very Pinsent Masons. success with the new turbines, on Iranian supplies and pres- oil prices! We will remember." ers have already scaled back investments positive and we discussed a The UK is the fourth larg- known as the HA class, critical sured by the potential Chinese In the range-bound mar- Iranian purchases, and it was number of areas whereby the est exporter to Qatar. In 2016, to rescuing its power division demand could wane. ket, Trump's tweets may drive unclear how easily other pro- The Qatari government has QFC and the City of London UK exports to Qatar amounted from a steep decline in sales US sanctions were im- prices down slightly, said ducers, such as Saudi Arabia, more than QR140 billion can potentially collaborate on to nearly QR11.2 billion regis- and profits. “This issue, if not posed by Trump in response to Tyche's Zahir, predicting that Iraq and Russia, can compen- worth of investments in UK. in the near future. We look tering a growth of 21.7 percent quickly resolved, could hurt Iran's nuclear programme. The such tweets would probably sate for lost supply. This includes stakes in BAA, forward to continuing to work compared to 2014. GE’s turbine brand image and Organization of the Petroleum continue with US midterm BNP Paribas oil strate- Sainsbury’s, Barclays, together.” The Qatari government market share,” Jim Corridore, an Exporting Countries and other elections approaching. gist Harry Tchilinguirian told London Stock Exchange, The meeting comes as also has more than QR140 analyst at CFRA, said in a note, producers, including Russia, "The last thing that he is Reuters Global Oil Forum: Harrods and The Shard part of QFC’s commitment billion worth of investments cutting his price target to $14 meet on Sunday in Algeria to going to want to have happen "$80-per-barrel Brent is a to further enhance the strong in UK.