Business & Finance Club Magazine - Finance Sector - Qatar: The merger proposal between IBQ and al khaliji banks has reached a new stage following the latter’s support to the idea, al khaliji chairman and managing director Sheikh Hamad bin Faisal bin Thani al-Thani has said.

“We are moving one step at a time,” Sheikh Hamad bin Faisal saud.

He said the “first step” was to explore the merger idea.

“The second step is accepting the idea, moving forward and starting due diligence by assigning a legal advisor, auditor and an international financial firm to help look at the merger, from the point of view of whether it is feasible and valuable for us or not.

“So, we are now moving on to the second step. Once we find the idea good, we will make an announcement,” Sheikh Hamad bin Faisal said.

Asked whether there was a roadmap for the merger, he said: “We have a roadmap; but we have not reached a stage where it is approved 100%. Still, we are looking at it.”

On why the two banks are considering a merger, Sheikh Hamad bin Faisal said: “The Qatar market is small and there are too many banks here… that’s why we want to merge. We have more banks and branches per capita in Qatar than in any other Gulf States.

“Having said that, I must tell you we have not reached a stage where we can say we are merging. We are exploring, talking and looking at the possibilities.

“But if the merger takes place, the new entity will be the third or fourth largest bank in Qatar.”

Earlier, al khaliji’s board of directors has approved the “initiation of merger talks” with IBQ. The decision was made during a meeting of al khaliji’s board of directors in Doha recently.

During the meeting, al khaliji directors showed their support to the merger idea and approved the appointment of financial, business, and legal consultants to advice on the requirements to proceed with the merger.

Following the meeting, Sheikh Hamad bin Faisal said: “An al khaliji-IBQ merger, if takes place, has many benefits across stakeholders. Customers benefit from a larger distribution network and greater variety of products and business lines, shareholders benefit from the accelerated expansion inside and outside Qatar and from higher profitability and value perspectives, and employees benefit from greater opportunities for personal development.

“The merger, if it takes place, will also boost market competitiveness and consolidation.”

Al khaliji is Qatar’s second largest retail bank by paid-up capital and a member of the Qatar Exchange 20 Index with approximately QR17.5bn in total assets and QR9.2bn in customer deposits.