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Qatar Considers Buying Stakes In UK Lloyds Bank and RBS


Qatar : 25 February 2011

Qatar is considering buying into UK lending firms Lloyds Banking Group and RBS and have proceeded with discussions about investing in Britain, according to Qatari PM Sheikh Hamad bin Jassim bin Jabr al Thani. Both Lloyds and RBS are partially owned by the state.

When al Thani was asked directly about investing in Lloyds and RBS, the PM replied that Qatar is open to investments within the UK and is currently involved in discussions.

The PM of Qatar, who also serves as the chief executive for Qatar Investment Authority (or QIA), the sovereign wealth fund for the nation, commented on these Qatar acquisitions during a press conference alongside Britain’s PM David Cameron.

Through the QIA Qatar owns stakes in many businesses including Barclays Bank, German automobile maker Porsche and J Sainsbury of the retail market.

At the beginning of February the Qatar Holding unit of the QIA made investments into Credit Suisse-issued contingent convertible bonds.

QIA has made several highly profiled investments including acquiring Harrods in London, a globally known landmark and business giant. That deal was worth £1.5 billion.

The analysts are forecasting that the QIA will be focusing more on Asian markets, as well as emerging markets in other areas. It is said that the QIA will need to move away from these high-profiled assets in order to have better diversification and capture a sustainable pattern of growth. In 2010 the QIA invested more funds into the Agricultural Bank of China.

The UK government holds about an 83 percent stake in RBS, while their stake in Lloyds sits at 40.6 percent. Both of these banking firms were bailed out by the government in the recent crisis. The government holdings in Lloyds and RBS are now being managed by the UKFI, a group formed especially for this task.

The UKFI would not comment on al Thani’s remarks regarding Lloyds and RBS. The UK government will likely sell off the holdings in the two banks, but not until the ICB (Independent Commission on Banking) releases its final report on the banking sector this coming September. The UK commission was set up in order to probe the sector and examine the possibility of splitting the leading lenders in the UK. Execs from the UKFI recently stated to the British politicians that shares in Lloyds and RBS would be put up for sale in rising markets, which indicates that all of the broader stock market slumps will have an impact on those plans.

http://www.qia.qa/QIA/
Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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