DUBAI Qatar National Bank QNBK.QA said on
Wednesday it bought 24 percent of Dubai's Commercial Bank
International CBI.AD for $302 million, the latest sign that
regional banks will consolidate to compete in a Gulf economic
Supported by a more than five-fold rise in oil prices since
2002, profits of Gulf banks have surged on growing demand for
credit from state and private investors to finance billions of
dollars of infrastructure, real estate and industrial projects.
Faced with growing competition from global players, lenders
in the biggest oil-exporting region are turning to
consolidation to help them better compete and diversify their
"This strategic stake is to broaden the network of QNB
outside of Qatar," said Andrew Duff, head of international
banking at QNB, the biggest bank in Qatar, the world's biggest
exporter of liquefied natural gas.
Qatar National bought 297.69 million shares, or a 23.77
percent stake, in Commercial Bank at 3.70 dirhams. The stock,
listed in Abu Dhabi, soared 7.72 percent to 3.66 dirhams on
"In a country like the UAE booming as it is, everyone would
like to participate in what's going on in the country," said
Alfred Fayek, director of EFG-Hermes' Gulf institutional desk.
"Some big-name banks would like to come here but they can't
get licences. It is better to buy a small bank." Commercial
Bank operates 12 branches in the UAE, the world's fifth-largest
oil exporter and second-largest Arab economy.
The Gulf state's economy is expected to expand 7.9 percent
this year in real terms, according to analysts polled by
Reuters in July.
Some 45 banks operate in the country of 4.5 million people,
according to central bank data. The biggest, Emirates NBD
ENBD.DU, operates 115 branches -- itself resulting from the
merger of Emirates Bank International and National Bank of
Dubai last year.
QNB Chief Financial Officer Ramzi Marie said QNB had no
immediate plans to increase the stake. The bank's profit jumped
71 percent in the second quarter.
"For now, this is where we stand," he said. "This will give
us a very important place in the UAE."
Gulf Arab banks have been expanding abroad as competition
intensifies in their home markets, and small UAE lenders are
Last year, Commercial Bank of Qatar COMB.QA bought a near
35 percent stake in Sharjah-based United Arab Bank UAB.AD,
while last week Global Investment House GLOB.KW of Kuwait
said it would buy 20 percent of National Bank of Umm al-Qiwain
Qatar National aims to boost foreign operations' share of
profit to as much as 30 percent within five years, expanding in
the Middle East and Africa, Chief Executive Ali Shareef
al-Emadi said in January.
The bank, which owns a more than 30 percent stake in
Jordan's Housing Bank for Trade & Finance THBK.AM, plans to
begin operations in Syria, Sudan and Mauritania this year, and
in March took over the government's stake in Tunisian-Qatari
The Qatar Investment Authority, the Gulf state's sovereign
wealth fund, owns about 50 percent of Qatar National.
(Additional reporting and editing by Thomas Atkins)