Banks in the Gulf have rarely taken minority stakes in banks elsewhere in the region but in recent weeks two prime players, Bahrain’s Ahli United Bank and National Bank of Kuwait, have been drawn to the attractions of the Qatar banking market.
Ahli united bank (AUB), a merger of London-based United Bank of Kuwait and Al-Ahli Bank of Bahrain, continues to build a pan-GCC operation through friendly acquisitions and last month it completed the purchase of a 40% stake in Al-Ahli Bank of Qatar, the country’s fifth largest bank.
AUB is paying Qr60 a share for the 40% holding, bringing the total price to about $200m. The deal values the bank at 3.3 times book and 14.5 times earnings. The purchase would provide the bank with a powerful capital injection, raising total shareholders’ equity to more than Qr800m from Qr 322m at the end of 2003 and fully supporting the expected economic growth in Qatar. AUB will also acquire a 10-year management contract for the bank. AUB chief executive Adel El-Labban expects to set a balanced strategy between corporate and retail, and to rename the institution Al-Ahli Bank.
National Bank of Kuwait (NBK) was expected to conclude the acquisition last month of a 20% stake in Grindlays Qatar Bank (GQB), the smallest of the seven local banks.
Standard Chartered acquired a stake in GQB in 2000, when it bought ANZ Grindlays Bank, but sold this last year because it already had a local operation. With this stake, NBK will also acquire a management contract for the bank, which it expects to rename International Bank of Qatar.
At the end of 2003, GQB had total assets of Qr1.3bn and showed net profits of Qr32.1m.
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