Qatar National Bank (QNB), the country's largest lender, reported a 3.6 per cent rise in second quarter net profits yesterday, in the first major results announcement by a Qatari firm since the country's economic isolation began a month ago.
The bank, which is also the largest lender in the Arabian Gulf, said its first-half net profit hit a record 6.7 billion Qatari riyals (Dh6.24bn), up about 7 per cent from 6.25bn riyals a year earlier, as loans grew 11 per cent. The bank also cited a drop in bad debt charges and lower staff costs as positive for its bottom line.
QNB reported a net profit of about 3.5bn riyals in the three months to June 30, compared with 3.38bn riyals in the corresponding period of 2016, according to its detailed results.
Three analysts polled by Reuters had on average forecast a quarterly net profit of 3.027bn riyals.
The bank did not make reference to the rift between Qatar and a coalition of countries led by the UAE and Saudi Arabia, which suspended political and economic ties with the country early last month.
QNB said last month that there had been no significant outflows of deposits since the rift started, adding it had a "robust" liquidity position. The country's central bank governor Sheikh Abdullah Al Thani said the sheikhdom had US$340bn in reserves that could help it weather its economic isolation.
According to Bloomberg institutional investors from the six-nation GCC were net sellers of Qatari stocks in almost every session since June 5, with about $240 million of outflows from GCC institutions. Qatar’s bourse dropped 10 per cent since start of the crisis, more than any other major global benchmark, according to the agency.
Moody's Investors Service last week changed the outlook on QNB's deposit ratings to negative from stable following a shift in the outlook for the government.
Moody's cited a weakening domestic operating environment, particularly for bank funding, and a reduced capacity of the Qatar government to support banks as reasons for the change.
QNB's net impairment losses on loans and advances to customers fell to 221.68m riyals, from 1.05bn riyals a year earlier, while the loan to deposit ratio hit 98.3 per cent compared with 101.7 per cent in June 2016.
Thirty-six per cent of commercial banks' total liabilities in May were to foreigners, including others in the GCC, although analysts say QNB's funding sources are more diversified than others.
with Reuters
