IslamicFinance.de

Qatari banks have met investors in Europe and Asia to gauge their interest in potential U.S. dollar bond issues. Access to international debt markets has become problematic since the diplomatic crisis has erupted. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar, accusing it of supporting terrorism. Cross-border deposits accounted for about a quarter of Qatar's total deposits, so banks started to look for alternative funding. Al Khalij Commercial Bank, Doha Bank, Qatar International Islamic Bank and QNB have all met investors in recent weeks. Feedback was positive, but investors also made clear that issuers would have to pay premiums in order to attract sufficient demand. According to an international portfolio manager, the premium that Qatari banks would have to pay is about 30-40 basis points. A second fund manager said Qatari banks would have to pay up not only because of the increased political risk, but also because of general market conditions in the region.

Fitch Ratings has affirmed Qatar National Bank's Long-Term Issuer Default Ratings (IDR) at 'AA-'. The agency has also affirmed the IDRs of The Commercial Bank, Doha Bank, Qatar Islamic Bank, Al Khalij Commercial Bank, Qatar International Islamic Bank and Ahli Bank and International Bank of Qatar at 'A+'. The Outlooks on all the Long-Term IDRs are Stable. Fitch has also upgraded International Bank of Qatar's Viability Rating, which is driven by its growth strategy, focusing almost exclusively on Qatar.

Although Central Bank of Qatar (CBQ) set the deadline requiring the country's conventional banks which have opened Islamic banking windows to close them down to be Dec. 31, 2011, it has passed almost without being noticed.
Some Islamic bankers are now stating that the move was required to prevent the alleged rampant co-mingling of conventional and Islamic funds at some of the Islamic banking windows, and that the Qatari Islamic banking sector has been successfully re-aligned and consolidated.
The clear message of the directive is that dedicated standalone Islamic banks are favored to half-way houses where co-mingling and all sorts of compromises are possible if not the norm.
The affected banks included the Al-Islami window of Qatar National Bank (QNB), the largest bank in the emirate; Commercial Bank of Qatar; Doha Bank; HSBC Amanah; Ahli Bank; Al-Khaliji Bank and International Bank of Qatar (IBQ), which between them had 16 Islamic banking branches in Qatar.

Difficult funding in Europe is making Middle East issuers to tap the still-liquid Islamic finance markets for funds.
Dubai-based Emirates Islamic Bank issued a $500 million, five-year Islamic bond with a yield of 4.718%, while Abu Dhabi-based First Gulf Bank sold a $500 million, five-year sukuk with a yield of 4.046%.
Moreover, Saudi Arabia's General Authority of Civil Aviation stated it plans to launch a government-guaranteed sukuk to pay for a new terminal at Jeddah airport, and Dubai-based Islamic mortgage company Tamweel announced a five-year, $300 million sukuk.
Majid Al Futtaim recently started a $1 billion Islamic bond program, while Doha Bank, Bahrain's Al Baraka Banking Group, Emirates Telecommunications Co. of the United Arab Emirates and Abu Dhabi National Energy Co., among others, could all be looking to issue Islamic debt this year.

R. Seetharaman, Chief Executive Officer of Doha Bank, stated that Islamic Banking is the right platform to boost ‘green financing’ as it is based on the concept of promoting good practices and values.
He also added that Islamic banking is not just a financial system but it is part of a total value-based social system that searches to enhance the general welfare of society as a whole.

Doha Bank is not going to fire any employees impacted by the Qatar central bank's ban on conventional banks engaging in Islamic finance.
Raghavan Seetharaman, chief executive , added that excess staff has already been deployed to its conventional operations.

Doha Bank wants to continue investing in Islamic finance even as it focuses on cross-border funding. The bank will also explore various other options including Islamic asset sales after the recent Qatar Central Bank (QCB) directive to commercial banks on their Islamic operations.
Doha Bank, which is predominantly a commercial bank with 89% of its assets in conventional side, is also planning to grow across the border.

Doha Bank wants to continue investing in Islamic finance even as it focuses on cross-border funding. The bank will also explore various other options including Islamic asset sales after the recent Qatar Central Bank (QCB) directive to commercial banks on their Islamic operations.
Doha Bank, which is predominantly a commercial bank with 89% of its assets in conventional side, is also planning to grow across the border.

Qatar's Doha Bank (DOBK.QA) does not expect a major financial impact from the central bank's decision to separate the Islamic operations of conventional lenders in the Gulf Arab state.
Doha Bank will continue to meet its contractual obligations within its Islamic business and will seek clarification from the central bank when required.
The central bank issued a circular to banks, saying it "has been decided to terminate the activities of the Islamic finance services" offered by conventional banks.
Other Banks effected by the directive include international lender HSBC (HSBA.L), Qatar National Bank (QNBK.QA), Commercial Bank of Qatar (COMB.QA), Al Ahli Commercial Bank AABQ.QA and International Bank of Qatar.

Doha Bank and Allianz Takaful, a major player in the Takaful insurance segment have jointly announced a Bancassurance partnership to promote Islamic Insurance products in Qatar.
In a function held at the Head Office of Doha Bank R Seetharaman, CEO of Doha Bank and Dr Abdul Rahman Tolefat, Chairman of Allianz Takaful signed on the landmark Bancassurance partnership agreement. Through this arrangement the bank will promote and sell Family Takaful products comprising of plans for protection, savings, investment and child education developed and underwritten by Allianz Takaful. The products which are denominated in dollars and Qatari Riyal will be available to both conventional and Islamic banking customers.