Qatar National Bank is taking advantage of European banks’ downsizing by extending its Middle East reach through acquisitions, a report said on Wednesday.
According to a stock market filing on 30 August, the state-backed lender of Qatar, which is 50% owned by Qatar’s sovereign wealth fund, is in early talks to buy French bank Société Générale’s majority stake in its Cairo-based unit. On the same day, the Qatari lender, now the biggest in the Middle East and north Africa with $91bn in assets, boosted its stake in Dubai-based Commercial International Bank, a report published in Financial Times said.
Analysts say the strategy of the lender is in line with the broader strategy of Qatar, an increasingly assertive political presence in a fast-changing Arab world. Doha has both an incentive to help build economic confidence in newly elected regimes and the financial firepower to do so.
“Qatar National Bank is ready for a bigger type of expansion”, says Ryan Ayache an equity analyst at Deutsche Bank in Dubai. “In many ways this mirrors Qatar itself – flush with capital, deploying political and economic muscle in the region and beyond.”
According to the FT report, Qatar has openly backed the funding of the Syrian opposition and provided military support for the removal of Moammer Gaddafi in Libya, has already shown that it wants a financial stake in the post-revolution Middle East.
In April, Qatar National Bank paid an undisclosed sum for a 49% stake in Libya’s Benghazi-based Bank of Commerce and Development. This year, QInvest, a unit of Qatar Islamic Bank, expressed interest in Egypt’s EFG-Hermes, the biggest publicly traded investment bank in the Arab world.
QInvest will pay $250m for a 60% stake in proposed EFG-Hermes Qatar deal, which will be discussed at an EFG shareholder meeting on 16 September. But the deal has also been controversial, fending off a counterbid and it was suspended by the Egyptian financial regulator in July because of a lack of clarity on details including minority rights.
Egyptian interests aside, Qatar National Bank is already present in nearly every country in the Middle East and north Africa, including Sudan, Iraq, Tunisia and Lebanon.
Société Générale announced to the Egyptian stock exchange on 30 August that it was in talks with the Qatari state-backed lender to sell its 77.2% stake in Egypt-listed National Société Générale Bank. Shares of Egyptian banks rallied on the announcement.
Analysts say that the bank’s investments are in line with broader Qatari interests, which include helping to strengthen the Egyptian banking sector. Doha has pledged $2bn to the Cairo-based central bank, the first $500m tranche of which has been deposited.
However, Qatar National Bank’s investments have not been limited to post-revolution states. In Dubai, it increased its stake in Commercial Bank International to 39.9% from 16.5%, the Doha-based lender said on 30 August, the leading financial daily said in its report.