Doha Bank to exit Pakistan, sees record earnings

21 June 2002

General manager of Doha BankSalah Jaidah told MEED in an interview in Qatar on 16 June that his bank is heading for record earnings in 2002 due to local and international economic trends. The bank is exiting Pakistan, boosting its New York office, working on plans to launch a mutual fund in local shares and completing the appointment of the senior management team.

Jaidah, who was appointed general manager in July 2001, said that Doha Bank was closing its Lahore branch and had decided to sell its branch in Karachi to a Pakistani commercial bank. Doha Bank is the second Gulf bank in less than a month to announce plans to close operations in Pakistan. Emirates Bank International executives told MEED earlier in June that the Dubai-based commercial bank was selling its Pakistan branches to United Bank.

Jaidah was in Karachi finalising the Pakistan divestment on 14 June when a bomb blast killed 14 people but he said that the move was part of a long-term plan. 'We have been in the process of reducing our operations for the last two years,' he said. 'We are exiting as a branch business, but we will keep some interest in Pakistan.'

Jaidah said that Doha Bank is to put more resources to boost activity through its branch in New York which is based in 100 Wall Street. 'We are very serious about our New York branch,' he said. 'It is a profitable operation. It also provides a service for Qatari banks in New York and for banks in other parts of the Arab world and Turkey.' Jaidah said Doha Bank plans to promote the New York branch as a service provider to more Middle East banks.

Jaidah said that Doha Bank, which reported an 8 per cent profit rise to QR 76.4 million ($21 million) in 2001 despite further heavy provisioning to comply with Qatar Central Bank regulations, was on track to report record earnings in 2002. 'We are overperforming last year substantially and we are overperforming the budget,' he said. 'There has been a big change in spreads with dollar rates going down and we are developing a good base for our off-balance sheet earnings.'

Jaidah said Doha Bank was aiming to increase fee income and had recently sold down a Nasdaq-linked dollar fund with a 106 per cent guarantee over three years managed by Merrill Lynch. The $5 million fund, sold in minimum units of $10,000, was oversubscribed. 'We are trying to do more of this and we are looking for another partner, perhaps Credit Suisse [ First Boston] or BNP Paribas,' he said.

Doha Bank is now working on a mutual fund of $20 million-25 million to invest in the buoyant Doha Securities Market. The launch of the fund, which will be open to non-Qataris, will follow final government approval of a mutual funds law.

Other developments cited by Jaidah include the launch of interbank services, perhaps by the end of 2002, the development of electronic banking services for retail customers, the opening of a new generation of smaller modern branches, an increased emphasis on project lending to capitalise on the construction boom beginning to develop in Qatar and the launch of new retail banking products possibly including home finance.

Rahavan Seetharaman joined the bank in June as assistant general manager and head of the support group. Jaidah said he is progressing with the selection of the head of the business group. The third group in the bank is the risk management and financial control group, which is headed by assistant general manager Paul Sinon who joined Doha Bank in 2001.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications