Al Khaliji: the latest bank to hit Qatar

The Doha based Al Khaliji Bank is offering 17 per cent of its shares in the initial public offering to Qatari nationals only. Investors can snap up 120 million ordinary shares at a par value of QR10 per share and the bank will ultimately raise about $330 million from the flotation. Initially, however, investors will be required to pay only 50 per cent of the par value at the time of application, meaning the bank will hope to generate about $165 million once the offer period ends on April 29.

Sharing it around

The Al Khaliji Bank has been formed by a combination of individual and institutional investors from Qatar itself, the UAE, Bahrain, Kuwait and Oman. Indeed, the bank has some 191 founding shareholders and they possess 312 million shares, or 43 per cent of the capital, and, according to the part-paid capitalisation set-up, have stumped up $428.9 million thus far.

The remaining 40 per cent of Al Khaliji's stock has been offered to investors across the GCC as a private placement and this is expected to raise $384.4 million, on the part-paid arrangement. When the bank was launched at the start of the year, following its receipt of approval from the Ministry of Economy and Commerce, it was revealed Al Khaliji is likely to make a cash call on its shareholders, within two to five years, in order to obtain the unpaid 50 per cent of its capital.

Ambitious aims

Al Khaliji's Chairman Tariq Al Malki is determined that, once the bank starts operating in the final quarter of the year, it will gradually emerge as one of the region's most prominent financial institutions. Commenting on the launch of the IPO, he said, 'We have made rapid progress since our establishment in January this year. We have recruited a highly experienced international executive team, obtained the bulk of our capital requirements from prominent shareholders across the GCC and are building the infrastructure of a truly world-class bank.'

David Proctor, who will head up Al Khaliji's executive team and who joined the new outfit from the Standard Chartered Bank where he was the CEO for the UAE, said the bank was committed to using new technology and employing high levels of customer service to offer modern, simple and friendly financial solutions.

Al Khaliji intends to focus on its domestic market in Qatar to start with but already it has aspirations to branch out to the UAE, Bahrain, Kuwait and Oman in due course. The bank will concentrate on building up both its retail and corporate banking segments.

Determination needed

But Al Khaliji is entering a pretty crowded market with a number of well-established local operators, from the Qatar National Bank, the country's biggest, to the shariah compliant Al Rayan Bank, which, since its shares were listed last summer, has been quick to make its mark. It has recently forged a strategic alliance with the real estate firm Qatari Diar and, just last week, launched its new $100 million investment arm, Al Rayan Investment, at the Qatar Financial Centre.

First of all, however, Al Khaliji will be hoping that its IPO ends up generating healthy subscription levels. With Arab stock markets still lurching along after the major crashes of last year, and the Doha Securities Market having fallen more than 36 per cent in the past twelve months, that eventuality certainly isn't a given - even if the appetite for share issues among some fairly battered and bruised Arab investors does appear to be undiminished.