Qatar's biggest bank keen on Al Amanah

Qatar’s biggest financial institution, the Qatar National Bank (QNB) has expressed interest in investing in the Al Amanah Islamic Investment Bank after the government offered to sell 40 percent of its stake with the possibility of having management of the bank.

Finance Secretary Margarito Teves, in a briefing held at Malacañang yesterday, said that the discussions about the entry of QNB into the Philippines’ first and only Islamic bank were held during the recently-concluded visit of President Arroyo to Qatar.

Officials of Qatar Investment Authority (QIA), which holds a 50-percent stake of the QNB, met with the President and her economic managers where they discussed possible areas of investments in the Philippines.

Apart from agriculture, fisheries and telecommunications as the primary sectors presented to the QIA for investments, Teves said that they also presented opportunities in banking and real estate.

Teves noted that they dangled 40 percent ownership of Al Amanah to the QIA along with the possibility of having the QNB manage the bank.

“The interest is there, especially because they would like to establish their presence in Mindanao and they would like to be able to use this as a vehicle for expanding their Islamic commercial banking operations in the Philippines and East Asia,” Teves.

“Therefore it would also serve for us as a vehicle for more FDI (foreign direct investments) from Qatar and the Middle East,” he added.

Earlier this year, the Bangko Sentral ng Pilipinas approved the sale of the Social Security System and Government Service Insurance System’s shares in the Al Amanah Bank to the Development Bank of the Philippines, giving the government financial institution full control of the bank.

Before the sale, DBP’s stake in the bank was only at 10 percent.

DBP’s plan to rehabilitate the bank includes bringing in a strategic foreign partner and the QNB could very well what they are looking for.

Based on information from the QNB’s website, the bank has steadily grown to be among the largest banks in the Middle East and is by far the leading financial institution in Qatar with a market share approaching 40 percent of banking sector assets.

QNB has the highest credit rating among regional banks from leading rating agencies including Standard & Poor’s, Moody’s, Fitch, and Capital Intelligence.

Teves disclosed that a due diligence team of the QIA is set to visit Manila in the first quarter of 2009, during which the Emir of Qatar would also be visiting.

Several attempts were made in the past to privatize the Al Amanah bank after it started incurring losses sometime in the 1990s.

The bank’s mandate is to serve the banking needs of the Muslim community.

It was formed as the Philippine Al-Amanah Bank in 1973 by virtue of PD 264 issued by then President Ferdinand Marcos but was re-established as Al-Amanah Islamic Investment Bank in 2000 to promote and accelerate socio-economic development of the Autonomous Regions of Muslim Mindanao where the poorest provinces are located.

As an institution that strictly adheres to the teachings of the Koran, the Al Amanah bank does not charge interest on its clients.