Statement of the Chairman of the Board
The Extraordinary General Assembly Meeting Held on Nov 24th, 2013
In the Name of God, Most Gracious, Most Merciful,
Dear Shareholders,
Ladies & Gentlemen,
Al Salamu Alaykum…
In the beginning and before we start with the agenda of the meeting, I would like to take this opportunity to thank all of you for accepting our invitation and attending this meeting which has been scheduled mainly to discuss the issuance of capital instruments. I would also like to extend my sincere thanks to the members of the Board of Directors (BOD) and the Executive Management Team for their efforts during the past years in promoting the bank and maintaining outstanding level of performances despite fierce competition in the marketplace and the ongoing aftermaths of the financial crisis experienced by various capital markets worldwide.
As you are all aware, the economies of various countries across the Globe including the economies of the developed countries are facing great difficulties, a number of countries in Europe as well are witnessing unprecedented economic reforms in order to exit from their crisis and restore economic situations back to the levels prior to financial crisis.
Despite all these circumstances, we have been able to withstand and achieve high growth rates in most of the financial indicators. We achieved a net profit for the first nine months of this year amounting to QAR 1.08 billion as compared to QAR 1.06 for the same period in 2012 registering a growth rate of 2%. We also achieved a growth rate equivalent to 18.4% in the return on average equity and a growth rate of 2.43% in the return on average assets.
Under the wise leadership of His Highness, Sheikh Tamim Bin Hamad Al-Thani – Emir of State of Qatar and the strength and durability of Qatar’s economy, we expect to attain added accomplishments at the financial, organizational and service levels in the coming periods.
As far as the agenda of the meeting is concerned, I would like to point out that we are planning to issue Tier 1 Capital instruments amounting to QAR 2 billion during the fourth quarter of this year. These instruments will be treated as equity instruments with a fixed return and will qualify as Additional Tier 1 Capital after QCB terms and requirements are being implemented pertaining to such issues and the issue shall be conducted through private placements by Qatari institutions and the maturity of this instrument shall be perpetual.
The issuance of these instruments will enhance Doha Bank’s Tier 1 Capital base and strengthen its Capital Adequacy Ratio whereas the instrument will be classified as an equity instrument. The obligations of the Issuer will be direct, unsecured, conditional and subordinated. This means that these instruments would be ranked junior to all other senior debt bonds and senior to the ordinary shares (common equity) of the Issuer. We would also like to specify that this issue is subject to the approval of Qatar Central Bank, Ministry of Economy and Trade and any other competent authorities.
Finally, on behalf of myself and the Board of Directors of Doha Bank, I would like to extend my sincere thanks and gratitude to H.H. The Emir, Sheikh Tamim Bin Hamad Al-Thani, and H.E. the Prime Minister, Sheikh Abdullah Bin Nasser Al-Thani, and the Minister of Finance, H.E. Mr. Ali Sherif Al-Emadi, and the Minister of Economy & Trade, H.E. Sheikh Ahmed Bin Jassim Bin Mohammad Al-Thani, and H.E. the Governor of Qatar Central Bank, Sheikh Abdullah Bin Saud Al-Thani, and H.E. the Deputy Governor of Qatar Central Bank, Sheikh Fahad Bin Faisal Al-Thani, and to all the officials of Qatar Central Bank, the Ministry of Economy and Trade, Qatar Financial Markets Authority and Qatar Exchange for their continuous cooperation and support.
Thanks and appreciation are also extended to the shareholders and customers who showed their confidence in us and to the Executive Management team and all the staff of the bank for their efforts during the year and for the impressive results that Doha Bank has accomplished.
Al Salamu Alaykum…
Fahad Bin Mohammad Bin Jabor Al-Thani
Chairman
Resolutions passed at the Extraordinary General Assembly Meeting of Doha Bank’s Shareholders
H.E. Sheikh Fahad Bin Mohammad Bin Jabor Al-Thani, Chairman of Doha Bank announced that the Extraordinary General Assembly in its meeting on 24 November 2013 approved the items included in the Assembly’s agenda pertaining to the issue of Tier 1 Capital instruments amounting to QAR 2 billion and that these instruments will be treated as equity instruments with a fixed return and will qualify as Additional Tier 1 Capital after QCB terms and requirements are being implemented involving this type of issue.
H.E. Sheikh Fahad also said that the issue will be made through private placements by Qatari institutions and the maturity of this instrument will be perpetual. Mentioned hereunder is the Resolution adopted by the Extraordinary General Assembly Meeting of Shareholders:
- The Extraordinary General Assembly of Shareholders unanimously agreed to amend Article No. (3) of the AoA of the Bank by adding the following paragraphs to item No. (1):
a. Issue bonds as per the terms and requirements of Qatar Central Bank.
b. Issue capital instruments qualifying as additional Tier 1 Capital as per the terms and requirements of Qatar Central Bank.
c. Trading in gold and precious metals.
- The Extraordinary General Assembly of Shareholders has unanimously agreed to issue Tier 1 Capital instruments amounting to QAR 2 billion either directly or through a Special Purpose Vehicle as per the terms of the Issue which shall include but not limited to the following:
a. The instrument of the Issue shall be Tier I Capital instruments qualifying as Additional Tier 1 Capital for Doha Bank in Qatar as per the terms and requirements of QCB.
b. The Issue Date shall be within one year from the date of EGM approval.
c. The Maturity of this instrument shall be perpetual, but callable only after six years.
d. The Issue shall be through private placements by Qatari institutions.
- The Extraordinary General Assembly of Shareholders has unanimously agreed to authorize the Board of Directors of Doha Bank to determine all the terms and conditions and undertake necessary steps and execution mechanisms for the Issue after obtaining the approval of Qatar Central Bank, the Ministry of Economy and Trade and any other competent authorities.
H.E. Sheikh Fahad added that the issuance of these instruments will enhance Doha Bank’s Tier 1 Capital base, strengthen its Capital Adequacy Ratio, and support bank’s prospects for achieving its strategic goals at the local, regional and Global levels. It will also strengthen bank’s lending capacity and improve its competitive edge especially in the light of the anticipated boom in various economic sectors in Qatar in the coming years.
Finally, H.E. Sheikh Fahad Bin Mohammad Bin Jabor Al-Thani said that the implementation of the resolutions issued in the Extraordinary General Assembly Meeting is subject to the approval of Qatar Central Bank, the Ministry of Economy and Trade, and any other competent authorities in Qatar.
Fahad Bin Mohammad Bin Jabor Al-Thani
Chairman
Brief on Proposed Issuance of Capital Instruments
Background and Rationale
The purpose of this memo is to set out the rationale behind the issue of Capital Instruments as shown in EGM agenda i.e Tier 1 Capital Instruments qualifying as additional Tier 1 Capital, describe the structure and the properties of the Instruments and highlight the process and key milestones to be followed in order for the issue of the Instruments to take place.
Doha Bank Q.S.C. is undertaking this Issue with the clear purpose of enhancing its Tier 1 Capital base. This hybrid instrument, which is treated as an equity instrument with a fixed return will qualify as additional Tier 1 Capital after QCB terms and requirements are being implemented. The Instruments do not dilute existing shareholders and offer no voting rights to the holder.
The Notes
The Tier 1 Capital Instruments are perpetual capital instruments which are being issued in the amount of QAR 2.0 billion in order to strengthen Doha Bank’s Capital Adequacy Ratio (“CAR”) as measured under the capital adequacy regime established by the Qatar Central Bank (“QCB”). For accounting purposes, the Issue is expected to be classified as equity under International Financial Reporting Standards (IFRS) and as additional Tier 1 capital under QCB Basel III guidelines of measuring CAR. The Capital Instruments will be callable by the Issuer after an initial period of [6] years.
The Instruments will carry a fixed interest rate and the issuer will pay the return to the holder of the Instruments on specified agreed dates during the first 6 years. After the initial 6 year period, the return Rate will be reset according to a pre-agreed price adjustment mechanism, taking into account the prevalent reference rate at that time. These returns are discretionary and non-cumulative. If a return is not been made in full on any return Payment Date, then a Dividend restriction will apply, which means that the Issuer cannot declare nor pay any dividends to ordinary shareholders, until such time as the return is fulfilled towards the holders.
The payment obligations of the Issuer with respect to the Instruments will be direct, unsecured, conditional and subordinated obligations of the Issuer. This means that claims in respect of the Instruments will rank junior to all other senior debt, but will rank above claims on ordinary shares (common equity) of the Issuer for these Instruments.
The Issuer
The entity issuing Tier 1 Capital Instruments will be Doha Bank directly or through a special purpose vehicle fully owned by Doha Bank. In case the SPV is used for this issue a possible vehicle (pending concerned regulatory authorities approvals) would be Doha Finance Limited (“DFL”), which was established in the Cayman Islands by Doha Bank for their bond issuance program. DFL is allowed under its Articles of Association to issue various instruments and the Bank does not foresee any major obstacles in using this vehicle as the possible Issuer for these Instruments.
Investors and Use of Proceeds
The Investors in this Issue will be institutional in nature and most likely, Qatari Government Related Entities (“GREs”) or other institutional investors from the State of Qatar. Doha Bank intends to use the proceeds of the Issue for general corporate purposes.
Issue Process and Shareholder Approval
The Issue process has been launched with the Board of Directors giving Management the authority to proceed with the preparation of all appropriate documentation for the Issue. The Board of Directors in this meeting is seeking the approval of the Extraordinary General Assembly of shareholders on the issuance of the Capital instruments (the “issue”) as shown in the EGM agenda to enable the Bank to undertake all necessary steps for the Issue.
Regulatory Approval
The terms and conditions of the Issue are subject to the approval of Qatar Central Bank, Ministry of Economy and Trade and any other competent authorities.
Fahad Bin Mohammad Bin Jabor Al-Thani
Chairman