Doha Bank Eyes Up To $1B Bond Issue By End Of Year - CEO

Doha Bank (DHBK.DO), Qatar's fifth-largest lender by market value, will sell up to $1 billion of bonds by the end of the year if the global recovery is sustained, the bank's chief executive officer said Monday.

"If global financial stability comes in before the year-end we should go for it," Raghavan Seetharaman told Zawya Dow Jones in an interview. "It has to be cost effective."

Seetharaman added that the bank would look to raise debt to strengthen long-term liabilities and hedge against a possible increase in the cost of funding due to interest rate rises in U.S. as the world's largest economy recovers from the worst recession since the Great Depression.

Qatar's currency, like other Gulf Cooperation Council, or GCC, states is pegged against the U.S. dollar.

Shares in Doha Bank closed up Monday 1.4% at 44.90 Qatari riyals ($12).

Rival, Qatar Islamic Bank (QIBK.DO), or QIB, the country's second-largest lender by market value, is said to have delayed in April selling $500 million of Islamic bonds due to uncertainty in regional capital markets. The bank now plans to issue bonds in the second half.

Doha Bank, which reported first-quarter net profit of QAR315 million, cancelled plans to issue $1 billion of Islamic bonds, or sukuks, in early 2008.

Seetharaman, chief executive since 2002, said that economies dependent on the financial services industry will suffer "a double dip recession", while Qatar's hydrocarbon revenues will protect it from another downturn.

"The world is not yet out of the woods and I foresee a double dip recession," he said.

Doha Bank will have non-performing loans of around 3% of its balance sheet at year end, he said.

In 2010, Seetharaman said the bank's focus will be on growing its Islamic finance arm and small to medium size enterprise funding, and that both divisions could expand by 20% over the next year.