DUBAI: Qatar National Bank (QNB), the largest lender in the Gulf, is expected to post another quarter of healthy profits today, with high public spending at home and rising revenue from its international operations helping underpin growth.
With QNB viewed as a gauge of the wider Qatari economy, the bank’s fourth-quarter results should signal the state’s resilience so far to falling oil prices, say analysts. Fifty percent owned by Qatar’s sovereign wealth fund, QNB’s fortunes are entwined with those of the state, especially as public sector loans account for about 60 percent of QNB’s lending activity and more 50 percent of its deposit base, according to HSBC.
“There will be a positive trend in 2015 in that there will be a pick-up in government infrastructure projects. They can fund these projects even with lower oil prices and that will provide potential for credit growth for Qatar banks,” said Laila Sadek, director of financial institutions at Fitch Ratings.
Analysts surveyed by Reuters expect the bank to post an average net profit of QR2.57bn in the fourth quarter, up 8.3 percent from the same period of 2013. QNB has been a major beneficiary of Qatar’s increase in public spending in recent years as the state invests in development projects and prepares to host the 2022 soccer World Cup.
And despite sluggish lending in those quarters, QNB has continued to post strong profit growth, with its third-quarter earnings up 21 percent year-on-year.
The fourth-quarter results will be the first since the bank acquired a 23.5 percent stake in pan-African lender Ecobank in September. It also bought Societe Generale’s Egyptian business for $2bn in March 2013 and has a presence in markets including the UAE, Libya, Mauritania, South Sudan, Sudan and Tunisia.
Reuters
