Qatar bank support plan ‘includes cash, bonds’
Doha, June 3, 2009
Banks in Qatar will get cash and bonds in exchange for selling their real estate investments to the government under a QR15 billion ($4.12 billion) programme unveiled last week, a newspaper reported on Wednesday.
Qatar said last week it would offer to buy up to QR15 billion of banks real estate investments and loans, more than tripling a support package to help lenders cope with a slump in equity and property markets.
Under the plan, banks would receive state cash and 10-year government bonds carrying a fixed coupon of 6.5 per cent per year in lieu of their real estate portfolios, daily Gulf Times reported, citing sources.
The measure "will free up the liquidity of banks and boost their capacity to finance development projects", the Doha-based daily reported. "The banks would have the right to repurchase the entire portfolio or any part of it."
The central bank will be responsible for implementing the plan by the end of June, Qatar's prime minister said last week.
Nine banks are eligible for the real estate support funding, which follows a state move to buy QR6.5 billion of banks' investment portfolios in March.
Qatar, the world's top exporter of liquefied natural gas, has suffered from property price declines of about 30 per cent in the last six months, according to some estimates. – Reuters