International Bank of Qatar (IBQ) has spent $250m buying Middle East assets from European banks eager sell in the secondary market to raise capital.
“Now is a great opportunity to get high-quality assets at a reasonable price from European banks who have to sell,” says George Nasra, managing director at IBQ.
He says that already the bank has spent $250m on purchases in the secondary market, including syndicated loans and bonds issued by corporates around the region, particularly Qatar and the UAE capital emirate Abu Dhabi. “We are still actively calling banks and buying assets,” Nasra adds.
European banks are currently selling off billions of dollars-worth of assets globally as they struggle to raise capital to rebuild their balance sheets as a result of the European sovereign debt crisis.
The bank plans to raise additional funding in 2012 through the bond markets. “In the first quarter of next year we expect to start the process of getting a credit rating, and in mid to late 2012 we will approach the bond markets,” says Nasra. He adds that the bank could raise about $500m, which will be used to fund the bank’s growth.
IBQ reported a 33.6 per cent rise in profits in the third quarter of 2011. Nasra says he is expecting the bank to grow profits by about 25 per cent in 2012. This is being driven across all sectors, says Nasra, with retail banking performing well as a result of the government and many private-sector firms announcing 60 per cent pay rises for Qataris, as well as progress on many of the major projects planned in Qatar.
Nasra says although he expects the increase in salaries for Qatari nationals to have an impact on profits, it will not be significant.