Talks over three-way Qatari bank merger collapse

Doha Corniche: A proposed merger of three Qatari banks has failed to materialize. (Reuters)
Updated 14 June 2018
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Talks over three-way Qatari bank merger collapse

  • Islamic lender Masraf Al Rayan and conventional lenders Barwa Bank and International Bank of Qatar (IBQ) have been in talks since December 2016 over a potential tie-up.
  • A shake-up has long been mooted in the Qatari banking sector, given that 18 local and international commercial banks serve a population of 2.6 million.

DUBAI: Talks to merge three Qatari banks have ended after they were unable to reach an agreement, the lenders said in a joint statement on Thursday.
Islamic lender Masraf Al Rayan and conventional lenders Barwa Bank and International Bank of Qatar (IBQ) have been in talks since December 2016 over a potential tie-up.
“The three banks could not reach an agreement to complete the transaction,” the lenders said in a bourse statement, without elaborating.
Sources close to the matter told Reuters the talks stalled over the past year as shareholders could not agree on valuations and due to client concerns about the possibility of converting IBQ into an Islamic lender.
Qatari regulations do not allow a bank to operate both types of lending, so IBQ would have had to convert its business to being Sharia-compliant should the deal have gone ahead.
A shake-up has long been mooted in the Qatari banking sector, given that 18 local and international commercial banks serve a population of 2.6 million.
KPMG was advising Masraf Al Rayan on the merger, with Perella Weinberg advising IBQ, the sources said. Credit Suisse was advising Barwa, they added.


Oil prices gain on lower US crude inventories, Libyan output disruption

Updated 33 min 58 sec ago
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Oil prices gain on lower US crude inventories, Libyan output disruption

SINGAPORE: Oil prices recovered some day-earlier losses in Asia on Wednesday, supported by a drop in US commercial crude inventories and the loss of storage capacity in oil producer Libya.
US crude inventories fell by 3 million barrels to 430.6 million barrels in the week to June 15, according to American Petroleum Institute (API) in a weekly report on Tuesday.
Brent crude futures rose 18 cents, or 0.2 percent, to $75.26 per barrel at 0351 GMT, compared with their last close on Tuesday.
US West Texas Intermediate (WTI) crude futures gained 20 cents, or 0.3 percent, to $65.27.
Traders said a drop in Libyan supplies due to the collapse of an estimated 400,000-barrel storage tank also helped push up prices.
Looming larger over markets, however, is a June 22 meeting in Vienna of the Organization of the Petroleum Exporting Countries (OPEC) with some other producers, including Russia, to discuss supply.
De-facto OPEC leader and top crude exporter Saudi Arabia, as well as Russia, which is not a member of the cartel but is the world’s biggest oil producer, are pushing to loosen supply controls introduced in 2017 to prop up prices.
Other OPEC-members, including Iran, are against such a move, fearing a sharp slump in prices.
“Saudi Arabia and Russia continued to push for a relaxation in production constraints, going against many other members’ wishes,” ANZ bank said on Wednesday.
“Iran rejected a potential compromise, saying it won’t support even a small increase in oil production. This puts Saudi Arabia in a tough position, as unanimity is needed for any accord to be reached,” it added.
Jack Allardyce, oil-and-gas research analyst at Cantor Fitzgerald Europe, said he had the “expectation that supply quotas will be increased, but probably more in line with the smaller range being quoted (300,000-600,000 barrels per day) given the lack of consensus among OPEC members.”
Allardyce said “we could see this knocking $5 per barrel off Brent and perhaps squeezing the WTI discount a little.”
Markets are also anxiously watching trade tensions between the United States and China, in which both sides have threatened to impose stiff duties on each other’s exports, including US crude oil.
A 25 percent tariff on US crude oil imports, as threatened by China in retaliation for duties Washington has announced but not yet implemented against Chinese products, would make American crude uncompetitive in China versus other supplies.
This would almost certainly lead to a sharp drop-off in Chinese purchases of US crude, which have boomed in the last two years to a business now worth around $1 billion per month.