x Abu Dhabi, UAESunday 21 January 2018

Qatar National Bank prepares $1.5bn loan ahead of repayment

QNB prepares a $1.5 billion loan as it seeks additional capital ahead of a $1.85bn repayment coming due next month.

Qatar National Bank is preparing a US$1.5 billion (Dh5.51bn) loan as it seeks additional capital ahead of a $1.85bn repayment coming due next month.

The bank, Qatar's largest lender, hired Bank of Tokyo-Mitsubishi UFJ, Deutsche Bank, HSBC Middle East, JPMorgan and Standard Chartered to arrange the loan. QNB is seeking a $1.5bn unsecured term loan repayable over three years.

The loan will be used for "general corporate purposes", the bank said in a statement to the Qatar Exchange, without giving further details. The funding would be the biggest yet arranged this year in Qatar, according to data from Bloomberg News. Banks have arranged $14.5bn of syndicated loans so far this year across the Middle East, Bloomberg data shows.

The bank, which has reported a rise in profits for 10 consecutive quarters, generated profits of 2bn Qatari riyals (Dh2.01bn) during the first quarter of this year, a 17.4 per cent increase from a year earlier.

QNB's shares rose 0.3 per cent to 131.4 riyals each in trading after the announcement, compared to a 0.2 per cent drop for the QE Index to 8,229.80.

The loan comes as liquidity constraints ease for Qatar's banks, said Elena Sanchez-Cabezudo, the director of equity research at EFG Hermes.

"Liquidity has been a little bit tighter over the past few months … but we're beginning to see a change in that trend," she said. "Some of the banks like QNB can get deposits from abroad and their deposit growth has been much greater than system levels."

The additional funding could help to allow for greater access to credit for the country's government-linked companies, which made up the majority of QNB's lending, she added.

Sector-wide lending has grown 11.6 per cent since the start of the year to 451.8bn riyals, according to the latest data from the Qatar central bank.


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