Doha Bank sells DSM equity portfolio to government
Doha Bank, one of the largest private commercial bank in the State of Qatar, recently announced that the Bank has completed all the necessary formalities towards the sale of the identified DSM equity portfolio to the government in a USD 147 million (QAR 537 million) deal as part of the government’s proactive measure to infuse liquidity in the market to support the ongoing developments of Qatar and the related financing needs.
Mr. R. Seetharaman, Chief Executive Officer, Doha Bank said “In this regard, the government has paid USD 66 million (QAR 239 million) in cash and USD 81 million (QAR 298 million) by way of issue of 5-year government bond carrying a fixed coupon of 5.5% annually”.
Mr. Seetharaman, continued saying “The identified DSM equity portfolio sold by us to government net book value as at February 28, 2009 stood at USD 147 million (QAR 537 million) and we also have the right to repurchase this entire portfolio, or any part of it, after a minimum period of 12 months from the date of sale and within a maximum period of 5 years at the original sale price”.
Mr. Seetharaman, continued saying “Qatar under the astute & visionary leadership of H.H. Sheikh Hamad Bin Khalifa Al-Thani, the Emir of the State of Qatar, is in the forefront in taking proactive economic measures, one like this, so that any risk arising there from are measured, monitored and managed. The current measure will also improve the risk profile of the local banking system and remove volatility in securities market. In fact after the government’s decision announced on the March 9, 2009 the market index has improved and moved forward positively”.
The bank’s announcement comes in light of the State of Qatar government’s decision on March 9, 2009 to purchase the DSM investment portfolios of local banks and the recent announcement by Qatar Central Bank informing that the government had bought USD 1.8 billion (QAR 6.5 billion) worth of local bank’s investment portfolios.
Mr. Seetharaman concluded saying “This proactive measure has started bringing market stability, will support us towards growth and improve the liquidity position of all the local players. This measure will go a long way in improving the earning capacity of the local banks”.