Qatar cash, prospects lure top bankers to local firms

* Qatar banks attract global bankers with pay, security

* M.Stanley's Subeai to join Barwa Bank arm - sources

* Goldman's Qatar CEO Kawari quit to join QInvest

* Global banks have cut investment banking jobs in region

(Recasts, adds details) By Dinesh Nair and Mirna Sleiman

DUBAI, Oct 10 (Reuters) - Qatar is luring high-profilebankers away from foreign firms by offering better pay andprospects, as the cash-rich Gulf state builds the talent neededto expand its financial footprint across the region.

The trend is a reversal of the traditional pattern inemerging markets, where high-profile multinationals have longbeen able to cherrypick the best executives for theiroperations.

Morgan Stanley and Goldman Sachs have lost their two topQatar executives to local Qatari firms, financial industrysources said this week. A slew of other bankers has moved to thetiny Gulf state in the past year as Western giants scale backtheir presence in the region to cut costs.

"Bankers today are faced with a tricky question. Do theystick to their risky jobs at gold-plated firms, or move toregional firms in places like Qatar where there is a bit moresecurity and in most cases more money?" said a seniorDubai-based banker.

"I am thinking they are choosing the latter option in mostcases," added the banker, who declined to be named because ofthe commercial sensitivity of the issue.

The recruitments are occurring as gas-rich Qatar, home tosovereign wealth fund Qatar Investment Authority (QIA), spendsbillions of dollars on overseas acquisitions and invests inpoorer Arab states partly to boost its political clout.

With an investment appetite of about $30 billion a year, QIAhas picked up stakes in high-profile Western assets such asminer Xstrata, automakers Volkswagen and Porsche, andsupermarket chain Harrods.

Meanwhile, Qatar is expanding in the Arab world's bankingsector mainly through Qatar National Bank (QNB), the largestlender in the Gulf state with a stock market value of about $26billion. The bank is currently in talks to buy the Egyptian armof French lender Societe Generale.

QNB has been snapping up stakes in small banks in theregion, and this year raised its holdings in Abu Dhabi'sCommercial Bank International and Iraq's Mansour Bank.


Managing and developing this growing network of investmentsrequires expertise. But the timing for Qatar appears almostperfect: it is seeking expertise at a time when foreign banksare cutting investment banking jobs in the Middle East as partof global cost reduction plans, and because they face toughcompetition for a limited amount of mergers and acquisitionsbusiness in the region.

"Investment banking jobs in the West have been at astandstill for some time. Local Qatari bankers are settling withlocal banks to get real experience in the local market, and dueto the lack of opportunities with international names," said R.Seetharaman, CEO of Qatar's Doha Bank.

Institutions including Deutsche Bank, Credit Suisse andJapan's Nomura Holdings have reduced jobs in their investmentbanking teams for the region in recent weeks.

Credit Suisse, in which Qatari investment firm Qatar Holdingowns a stake, is trimming its investment banking team in Dubaiand relocating some jobs to Qatar as part of efforts to focus onniche markets, industry sources told Reuters last month.

Morgan Stanley's Qatar head Khalid al-Subeai resigned lastweek to join the investment banking division of Qatar's BarwaBank, while Goldman's Qatar chief executive Tamim al-Kawari hasjoined QInvest, part-owned by Qatar Islamic Bank, as deputy CEO,according to sources familiar with the matter. Both men areQatari citizens.

Morgan Stanley and Barwa Bank declined to comment. A GoldmanSachs spokeswoman confirmed Kawari's departure, which took placethis summer but was not publicly announced. The sources spoke oncondition of anonymity as the matters had not been made public.

In Qatar, "you can see that the top brass is grooming theyoung talent to take up bigger roles, and the hirings could bepart of that move," one foreign banker said of Qatar.

"These are the kind of people who will run the sovereignfund in future. It's a very smart move and very much expected ofQatar."


The influx of banking talent to Qatar includes someexperienced executives who are moving there from rival financialcentres nearby, such as Dubai.

For some, the move raises potential quality of life issues.With a population of just 1.8 million including 250,000 Qataricitizens, Qatar is smaller and less glamorous than glitzy Dubai,which has been building itself as a cosmopolitan city for atleast a decade longer.

A 2011 survey by consultants Mercer ranked Dubai as 74th ina global ranking of cities for their quality of living, withneighbouring Abu Dhabi at 78th. Qatar's capital Doha came insignificantly lower at 106th.

The rankings may change, however, as Qatar conducts amassive infrastructure building programme before it hosts the2022 soccer World Cup. And even now, the attractions of workingfor an active and expanding financial establishment are clearlyenough for many bankers.

In June Commercial Bank of Qatar hired Sarmad Lone,previously Dubai-based Middle East investment banking head ofMorgan Stanley, to head up its wholesale banking business.

Barwa Bank hired Ihsan Khelef from HSBC Holdings' Dubaioffice to head its debt capital markets business early thisyear. Khelef was responsible for regional sovereign debtissuance at the British bank.

Since then, Barwa has been involved in several high-profileIslamic bond sales in the region, including Qatar's $4 billionissue in July.

(Additional reporting by Regan Doherty in Doha and Rachna Uppalin Dubai; Editing by Andrew Torchia)

((dinesh.nair@thomsonreuters.com)(+ 971 4 366 4265)(ReutersMessaging: dinesh.nair.reuters.com@reuters.net))