DOHA QATAR, owner of London’s famous Harrods department store, is set to take full control of the luxury store’s private banking arm, unwinding a trust structure set up under previous owner Mohamed al Fayed, British media has reported.
The Financial Services Authority (FSA) in London gave Qatar Holding the green light to purchase the controlling shares in the bank held by a trust, The Daily Mail said in a report on Monday.
Harrods Bank Limited is a private personalised banking service which operates from the Harrods store in Knightsbridge, London.
Harrods Bank was started in 1893.
“A new board has been appointed to support this exciting development,” a spokeswoman for the bank said, adding that she was delighted with FSA’s decision.
Al Fayed, who owned the bank until 2010, set up the structure, reportedly under pressure from the Bank of England over his fitness to run a bank.
Before Qatar’s acquisition of Harrods, the assets of the bank stood at £50,115,240 in 2010 while the liabilities stood at £42,560,840.
“Qatar is hoping to expand the bank, which racked up a £1.7million loss in the year to the end of January 2012 after losses on one bad loan,” the paper reported.
“The loss has been significantly increased this year as the result of the need for a large provision of £800,000 against an impaired loan”, it said.
“Overheads have increased as the bank has begun to make an investment in IT systems and people development to allow for future expansion,” it added.
Meanwhile, the luxury store’s airport arm reduced its losses in 2011.
Harrods Aviation posted a pre-tax loss of £20million, down from £2.90million the previous year, the paper said. Harrods Aviation, which operates from Stansted and Luton, provides an airport service for executives to board their private jets discreetly.
Clients can drive all the way to their planes or use helicopters provided by sister company Air Harrods to whisk them away from their aircraft and into the centre of London in ten minutes. The company also carries out maintenance on customers’ jets.