Doha Bank appoints JP Morgan for capital hike plan

ZAWYA DOW JONES

DOHA

DOHA Bank, which could look to raise up to QR4billion ($1.09 billion) in fresh capital early next year to boost its lending firepower, has appointed JP Morgan as sole adviser on the deal, a person familiar with the matter said.

JP Morgan is the sole coordinator and bookrunner on the capital raising, this person, who declined to be identified, told Zawya Dow Jones.

Doha Bank, Qatar’s fifth largest lender by market value, is planning a 50 percent capital hike in the first quarter of 2013 pending approval from regulators and shareholders, the bank said last month.

Doha Bank wasn’t immediately available for comment. Banks are expected to fuel a lending spree to finance a wave of governmentfunded infrastructure building in the run-up to the 2022 soccer World Cup in Qatar.

Doha Bank could look at a rights issue to raise funds or it could to list Global Depository Receipts, or GDRs overseas.

Rival Qatari lender Commercial Bank of Qatar raised around $900 million via a rights issue and GDR listing on the London Stock Exchange in 2008.

Shares in Doha Bank were trading 0.6 percent higher on Monday at QR54.50 in a slightly positive overall market.

Doha Bank’s net profit in the first quarter of 2012 rose by 7 percent to $107 million compared to $100 million in first quarter of 2011. Total deposits during the first quarter of 2012 rose by 11.8 percent at $8,613 million compared to $7,704 million in the same quarter of 2011.

Total advances rose by 13.1 percent to $8,113 million compared to $7171 million in the same period last year.

The capital increase will help the bank participate in the country’s ‘major infrastructure’ projects and expand overseas. The increase will also help the bank meet capital requirements under the new Basel III rules.

The fundraising will boost Doha Bank’s core tier-1 equity to 19.2 percent at the end of 2013 if it raises money at the current market price from 9.6 percent now, he said. Tier-1 equity will rise to 16.8 percent with a discounted sale.

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