Qatar sovereign wealth fund bails out banks

Qatar’s sovereign wealth fund has repatriated about $20bn to help support the country’s banks and ease the effect of the Saudi Arabian-led boycott.

The Qatar Investment Authority, which has about $320bn of assets, placed the funds with local lenders after the diplomatic crisis started, according to the country’s latest bond prospectus, a copy of which was seen by Bloomberg.

The cash injection came as almost $30bn of non-resident deposits left Qatari banks, the document shows.

Qatari banks, already stretched by financing demands of the $200bn 2022 World Cup, took a blow from its neighbours’ abrupt decision to cut ties in June 2017.

Qatar, the world’s biggest exporter of liquefied natural gas, relies heavily on foreign cash and foreign deposits — especially from the six-nation Gulf Cooperation Council.

The cash injections were coordinated by the finance ministry and the Qatar Investment Authority, according to the prospectus. The country’s central bank has also relaxed a cap on bank loans exceeding deposits that was introduced in 2014 and plans to change the definition of deposits to include long-term debt instruments, the prospectus said.

The Qatar Investment Authority — the world’s ninthlargest sovereign wealth fund, according to the Sovereign Wealth Fund Institute — owns stakes in international firms ranging from Glencore to Barclays. The fund sold its stake in Veolia Environnement in March for about $622m, months after it reduced holdings in Tiffany & Co and Credit Suisse.

Qatar was starting meetings with fixed-income investors on Monday as the country plans its first dollar-denominated bond sale in about two years.

Officials will meet with investors in the US and UK and the government is working with Credit Suisse and Deutsche Bank, among others, on the offering that could include fiveyear, 10-year and 30-year notes, according to people familiar with the plans.

THE CASH INJECTION CAME AS ALMOST $30BN OF NONRESIDENT DEPOSITS LEFT QATARI BANKS