QNB profit up 17% to QR2bn in first quarter
TRIBUNE NEWS NETWORK
QATAR National Bank (QNB), Qatar’s largest lender by market value, said on Wednesday that first quarter net profit rose 17 percent to QR2 billion ($549 million) from QR1.70 billion in the year earlier, on strong loan growth and rising customer deposits.
The quarterly result beat the QR1.93 billion effort that analysts at EFG Hermes had forecast, but was short of the QR2.12 billion that Global Investment House had pencilled in.
The bank’s results are widely watched by investors and analysts to gauge to the overall health of Qatar’s banking sector, which continues to perform well thanks to heavy government support since the onset of the financial crisis in late 2008.
Loans and advances jumped 43 percent to QR201.2 billion, while customer deposits rose by 21 percent year-on-year in the first quarter to QR218.4 billion, the bank said in a statement.
Net interest income and revenue from Islamic financing activities increased 32 percent to QR2.2 billion.
The bank plans to expand operations across the Middle East and North Africa over the next five years and diversify income sources, it said in its earnings statement.
Earlier in the year, QNB Finance, a unit of QNB, raised $1 billion through the sale of a five-year bond. Banks in Qatar are seen to be preparing themselves for a lending splurge as the country gears up to host the 2022 World Cup.
The QNB, 50 percent owned by the government, has been linked to the purchase of Denizbank, the Turkish unit of Belgian lender Dexia.
Shares of the bank ended 0.7 percent down at QR135.90 on Wednesday.
The bank has a high rating assigned to it from a number of leading rating agencies. The bank’s ratings are considered amongst the highest amongst the leading financial institutions in the region due to its strong financial position, high quality of its assets and its leading position in the financial sector.
Based on the group’s strong capitalisation and high credit ratings, QNB was named one of the world’s 50 safest banks and one of the safest banks in the Middle East, according to the latest update published by Global Finance in April 2012.
The QNB Group launched its debut bond issue under its Euro Medium Term Note Programme in the international capital markets which amounted to $1 billion with a 5- year maturity at a coupon rate of 3.375 percent. This highly successful issue received an overwhelming interest from regional and international investors.
Ambitious plans for the future with innovative banking services and a new 5-year strategic plan was approved which aims to make QNB Group a Middle East and Africa Icon.
The new strategy aims to maintain the group’s position as the leading bank in the area by expanding and improving operations, diversifying income sources, and achieving a high return to shareholders.