November 1, 2018 / 10:37 AM / 20 days ago

Development bank APICORP expects 15 pct asset growth in 2019, CEO says

DUBAI, Nov 1 (Reuters) - The Arab Petroleum Investments Corporation (APICORP) expects asset growth of up to 15 percent next year as it plans to enter new regional markets, its chief executive told Reuters.

APICORP’s mandate is to promote the development of the Middle East energy industry. The bank, a frequent issuer of international bonds, has also joined in several loan deals as the regional energy sector has had to raise money to cope with lower oil prices.

Owned by the Organization of Arab Petroleum Exporting Countries, APICORP had total assets of $6.6 billion at the end of June, according to its latest financial results.

APICORP’s assets – including equity investments, loan book and treasury – rose 13 percent between 2017 and 2018, CEO Ahmed Ali Attiga said in an interview, and the expectation is for assets to continue to grow at a similar level next year, with a target of 12 to 15 percent.

The bank is planning to enter new markets in the Middle East and is particularly looking to develop the equity side of its business, which would include buying stakes in companies.

“We’d like to do more equity. It is a strategic objective for us to enter new markets, to create partnerships with new clients, particularly in the private sector,” said Attiga.

APICORP’s main business has been in the Gulf region, and particularly in Saudi Arabia, but the bank wants to branch out into other countries such as Egypt, Iraq and Algeria.

“Iraq is looking promising, with huge investments expected,” the CEO said.

APICORP is also looking to support renewable energy developers across the Middle East, including Saudi Arabia’s plans to develop renewable capacity.

Attiga said APICORP is a partner of Saudi Arabia’s Public Investment Fund in some investments and is in frequent contact the fund on new projects.

He said APICORP had not been in direct talks with oil giant Saudi Aramco about its planned acquisition of Saudi Basic Industries Corporation (SABIC) – a deal potentially worth up to $70 billion and likely to be financed with debt – but he said the bank could consider becoming a lender to Aramco “depending on how the opportunity presents itself.”

“But I would like to add value in lending to those who need it, I’d like APICORP to go were others don’t go,” Attiga added.

APICORP set up a $3 billion conventional bond programme this year and has a $3 billion sukuk programme in place.

Its latest bond issue, a $750 million five-year conventional bond sold in September, attracted orders of more than $3.5 billion. The bank plans to issue more international bonds next year, Attiga said.

Rating agency Moody’s last month changed APICORP’s outlook to “positive” from stable, and affirmed its Aa3 credit rating. Moody’s said a key driver for the outlook change was APICORP’s progress in reducing the mismatches of its balance sheet maturities and the diversification of its funding profile.

Reporting by Davide Barbuscia. Editing by Jane Merriman

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