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International Bank of Qatar (IBQ) has sold its Al Yusr Islamic banking retail operations to the new-generation Barwa Bank, seven months after the Qatar Central Bank (QCB) directed the commercial lenders to scale down their Shariah-principled businesses.
Under the terms of the agreement, the sale includes the Al Yusr retail loans and deposit account portfolios, the two branches at Al Sadd and Al Rayyan, including ATMs, and the transfer of Al Yusr employees to Barwa Bank. The private and corporate banking portfolios, however, are not part of the deal.
An agreement has been signed by IBQ managing director George Nasra and Barwa Bank CEO Steve Troop.
The transaction has received the approval of the QCB and the Shariah boards of both banks. However, the banks did not specify the money involved in the deal.
IBQ is the first commercial lender to sell Islamic retail banking after the QCB gave time until December for the conventional banks to close their Islamic financing window as it felt the country’s monetary policy has been stymied, hindering the creation of new liquidity management tools, due to the overlap between the Shariah-principled banks and conventional banks’ Islamic windows.
“While the ruling from the QCB necessitated the sale, we feel Barwa Bank will be able to offer our retail customers the best Islamic banking services in the market,” Nasra said.
Under the terms of the agreement, Barwa Bank will take on existing Al Yusr employees, “which IBQ value a great deal and which can continue to provide an excellent service to Al Yusr customers making the transition as seamless as possible to the valued customers”, according to him.
“From the strength of its portfolio to the employees currently involved with its operation, we believe this transaction will both strengthen Barwa Bank and allow us to serve even greater numbers of customers seeking the best Islamic banking products in Qatar,” said Troop.
Goldman Sachs International and Linklaters advised IBQ while The First Investor and Eversheds advised Barwa Bank.
Qatar has 14 conventional banks (six domestic, one specialised and seven foreign-owned) and four Islamic banks, all of which come under the ambit of the QCB.
Domestic banks are QNB, Commercialbank, Doha Bank, IBQ, Ahlibank and al khaliji. A specialised lender is Qatar Development Bank. Foreign banks are HSBC Middle East, Standard Chartered, BNP Paribas, Arab Bank, Saderat Iran Bank, United Bank and Mashreq Bank.