Qatari buys Banif to set up private banking

One of the largest private companies in Qatar, Al Faisal Holdings, has bought Banif Portugal group’s 78.6 per cent shareholding in Banif Malta, ending a three-year attempt to find a buyer.

In February 2016, Oitante SA said it had reached an agreement to sell its shareholding for €18.4 million but gave no information about the acquirer – and, since then, Al Faisal’s investment arm has been scrutinised by the Malta Financial Services Authority and the European Central Bank in an intense due diligence exercise.

The other shares are split equally between Mizzi Capital Projects, PG Holdings SAK Ltd and Virtu Investments, and are not affected by the acquisition.

Established in the 1960s, Al Faisal Holdings has become a worldwide, multimillion dollar enterprise with an extensive range of business activities involved in real estate, commercial and industrial activities undertaken by over 20 companies that operate under the umbrella of Al Faisal Holding.

Michael Collis, the CEO of the holding company’s investment arm, said the first contact with Malta was made through trade missions to the Gulf, which piqued their interest for many reasons, including its EU membership, geography and political stability.

“That was how Malta came into the equation. The bank was an opportunity we saw around a year ago and thought it would fit in with what we wanted to do in terms of expanding into financial services,” he said.

Al Faisal Holdings is not completely new to banking as it has an eight per cent stake in a large commercial bank in Qatar as the second largest shareholder.

The plans are to retain Banif Malta’s business model – including its 12 branches – based on a mix of retail and corporate but to expand it to institutional and private banking.

“We believe that there is room in Malta for another strong player and we intend to provide the resources – including capital – for the bank to grow. Clearly, given where we are from, we will be looking at more opportunities going forward. As a financial services centre, Malta is a good location for private banking business. We think there will be significant interest from our region to invest in Malta and the surrounding region in the next few years. Banif Bank will be a good conduit…”

He said that Islamic finance was naturally of interest and that there were opportunities in Malta and in the region for this – as part of the product range, albeit not a core aspect.

“Islamic finance lends itself to infrastructure and there are various initiatives where this will possibly be of interest,” he said.

Al Faisal managing director Mohamed Shafiek told The Business Observer that Banif would not be the only transaction: “There will be other investments in the future. We are very diversified and are active in real estate, manufacturing, trade services, education and hospitality.

“Our partners are usually the ‘best in class’ and we are currently discussing with them the possibility of having manufacturing here, including pharmaceuticals and hi-tech.

“We are also interested in the hospitality sector and would be interested in buying or developing a hotel. In our group we have a division – Artic – which owns 35 hotels around the world, 15 of which are in Doha, with six in the US and others like the Grand Hyatt in Berlin. We deal with most of the brands, from Marriott to Four Seasons, to W.”

The company founder, Sheikh Faisal Bin Qassim Al Thani, is the chairman of the Qatari Businessmen Association which had hosted a trade mission to Doha from the Malta Chamber of Commerce, Enterprise and Industry – one of many delegations over the years. “We started with the first investment here but we believe that other Qatari businessmen will follow. Malta can be a model like Singapore as it is actually in a very good position geographically with Europe to the north and Africa to the south. We believe that our investment in the bank will maximise this role,” he told The Business Observer.

The sale, for an undisclosed amount believed to be less than the €18.4 million mentioned 10 months ago, was mandated after the Portuguese bank received a State bailout, one of the conditions being that it sold its investments abroad, including that in Malta, Brazil and the Cape Verde islands by 2017.

The divestment is similar to the forced sale of Volksbank in Malta after its parent company in Austria received state aid, and similarly has nothing to do with whether the assets being sold are profitable or not.

Indeed, Banif Malta made a pre-tax profit of €253,000 in 2013, which improved to €1.4 million in 2014 and again to €1.5 million in 2015.

Banif Malta CEO Joaquim Silva Pinto said the challenge since the forced sale was announced had been to keep the bank operating and profitable and within regulatory thresholds. The bank reduced its position in the market and increased its margin, and, in spite of the uncertainty, managed to retain most of its 160 staff.

“The main preoccupation is to generate the conditions for it to resume its previous growth, which has been on hold for these few years,” he said.

“The most important factor was the management criteria and we were controlling profits and losses very well and handling decisions in a faster way than usual. We are probably the fastest bank in the market when it comes to credit recuperation and do not take unnecessary risks.”

In the past Banif was hit by some high-profile impairments, but Mr Pinto said they have been handled and provisions had been taken.

“The governance model of the bank has imposed a routine within the bank which made it healthier than expected. And this is a routine that the bank does not want to lose. You have to control costs all the time.”


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