Doha Bank’s extraordinary general meeting has approved the board’s proposal to “raise capital by 20% up to QR3.1bn from QR2.58bn” through a rights issue to meet the bank’s strategic business development requirements.
Doha Bank chairman Sheikh Fahad bin Mohamed bin Jabor al-Thani, who presided over yesterday’s annual general meeting, said the bank will issue 51.67mn new shares to existing shareholders at QR25 per share, representing a premium of QR15, in addition to a nominal value of QR10 per share.
“No doubt, there were challenges faced by capital markets in this region due to the recent substantial decline in oil prices, in addition to the political uncertainty in the Middle East that had adversely affected all economic sectors including the banking sector and market liquidity.  
“Therefore, most of the financial institutions opted either for increasing their share capital or issuing bonds and debit notes to overcome this problem. However, this situation may increase the pressure on banks’ performance during 2017 as well,” Sheikh Fahad said.
Speaking to Gulf Times on the sidelines of the meeting, Doha Bank CEO Dr R Seetharaman said, “The rights issue is going to help us give nearly QR1.3bn worth of added incremental capital for the purpose of compliance with Basel III, as well as to commence the bank’s overall growth plans.” 
He added, “In line with the new Qatar Central Bank governance compliance, we have scaled up our existing directors from seven to nine, and this would also strengthen the overall governance standards.” The meeting also granted the board “and those authorised by the board full authority to execute the issuance and to determine the time and the related terms and conditions, deal with unsubscribed shares and any other issue that may arise during the subscription process, after obtaining the approval of the Qatar Financial Markets Authority, the Ministry of Economy and Commerce, and any other related competent authority.”
Asked about Doha Bank’s plan to launch exchange traded funds (ETFs) next month, Seetharaman said, “That’s what we’re targeting now. The plan is still online and we are just completing certain formalities and hopefully we should be ready by the end of April.”
Once the Doha Bank’s ETF made its debut, Seetharaman said, he expects to see more local ETFs being launched in the market.
“It’s going to be huge because Qatar is a country of substance. Instead of showing individual indices, we will show the industry as a whole and the country as a whole as an index, and that’s what we’re going to showcase in the market – that the economic fundamentals are strong and the country has got sustainable performance, as well as economic, political, and social stability,” Seetharaman stressed.