Biggest Qatar bank mulls financing options

Ongoing pressure from UAE, Saudi and others threatens to weaken liquidity in the gas-rich country

Qatar National Bank is considering seeking finance as pressure from neighbours starts to bite. Emre Rende / The National
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Qatar National Bank is considering options to raise financing, people familiar with the matter said, as an ongoing standoff with its Gulf neighbours threatens to weaken liquidity in the gas-rich country.

The Middle East’s largest lender by assets held early discussions with international banks about the possibility of a private placement, bond sale or loan in the fourth quarter, said the people, asking not to be identified because the information is private. Final decisions haven’t been made and the bank may decide against a deal, the people said.

There is no definite decision in this regard, a QNB spokesperson said.

Qatari lenders are under pressure after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic relations and closed transport routes in June, accusing the nation of funding Islamist terrorism. Foreign deposits at Qatar’s banks may fall further after dropping the most in almost two years in June as some Gulf lenders refuse to roll over holdings, people with knowledge of the matter said last week.

“Finding reasonable financing options for QNB now has a signalling effect that it sends out to the market, namely it does not rely solely on Qatari Central Bank liquidity actions and can access various funding options in a difficult environment quite easily,” said Sergey Dergachev, who helps oversee about US$14 billion (Dh51.4bn) in assets as a senior money manager at Union Investment Privatfonds GmbH in Frankfurt. “The window of opportunity to issue now is excellent because currently there is less noise around the Saudi-Qatar dispute.”

* Bloomberg