Commercial Bank eyes $500mn bond issue in 2021: Abraham

Commercial Bank is looking to issue a $500mn bond this year, Group CEO Joseph Abraham said yesterday.
“We are looking at a five-year bond, at least $500mn, which is the benchmark sum in the international market. In addition to that, we are also exploring additional Tier 1 issuance, which is a sort of capital issuance, again from the international market,” Abraham told Gulf Times yesterday.
He said this will be the first time Commercial Bank would be going to the international market for a Tier 1 issuance. That’s different from a senior bond, which is an EMTN issuance.
“Both of these we are looking at… as our chief financial officer Rehan Khan mentioned, we believe the markets are very receptive to paper issue from Qatar…the yields are attractive and therefore, we believe there will be a good result,” Abraham said.
In reply to another question, Abraham noted, “In terms of the lifting of the blockade (on Qatar) and Covid-19 vaccine roll out, they are good for sentiment. I think it lifts the sentiment of the people. In terms of the vaccine, it is not just for Qatar, it is also for the international markets - the international deployment of vaccine. It is definitely a positive for the sentiment. The benefits will be to the hospitality, restaurants, hotels, and travel and retail sectors, in particular. But I think it will take time for all these effects to come through…it is not going to happen overnight.
“And the government’s infrastructure upgrade has accelerated, which means there is more fiscal space. Given that Qatar’s budget is based on a conservative oil price of $40 per barrel and the current oil price is around $55, you will see investments in the North Field to expand gas capacity by 60%. And you will see continued expansion in the Hamad International Airport, Hamad Port and logistics and free zones. And, then, there is a move towards electric vehicles (EVs). We see a lot of very positive moves. Plus, the government has also made policy measures on real estate. For investments in real estate above a certain value, you will get residency, which again will help support some aspects of the real estate market.
“We will support all sectors of the economy…a lot of support in infrastructure and logistics area and even some of the PPP schemes that are coming out for schools and housing.”
Asked about Commercial Bank’s targeted loan growth, Abraham said, “The country’s GDP is expected to grow over 3% in 2021… I would say, we would be in the 5%-6% range for loan growth. This is our guidance.”
On whether Commercial Bank planned to enter the Saudi market, he said, “Currently, we have no plans to enter the Saudi market, or any other markets. We currently have a presence in Oman, the UAE and Turkey. Our focus is on optimising these presences and making sure they are generating the returns that we seek and that they are well managed.”
On plans to open more ‘premium branches’ in Qatar, the GCEO said, “The nature of customer interaction is changing and there has been widespread digital adoption among our customers. We have also put in efforts to make sure that our customers can meet their banking needs, as far as possible, digitally. We will be opening more of ‘premium branches’ and ‘smart branches’… that’s the planned position for our branches. It is evolving our branch network to cater in a better way to the evolving needs of our client base.”