Qatar National Bank posts 16% rise in Q2 net profit

The bank’s profit was boosted by its purchase of Turkey’s Finansbank



The Gulf’s largest lender, Qatar National Bank (QNB), reported a 16 per cent rise in second-quarter net profit on Tuesday, broadly in line with analysts’ forecasts and helped by its purchase of Turkey’s Finansbank.

QNB, which is 50 per cent owned by sovereign wealth fund Qatar Investment Authority, completed its 2.7bn euro purchase of Finansbank from National Bank of Greece in June, helping cement its position as the largest lender in the Middle East and Africa by assets.

QNB’s net profit totalled QAR 3.38bn ($928m) for the three months to June 30, up from QAR 2.91bn in the corresponding period of 2015, according to its financial statement.

Three analysts polled by Reuters had on average forecast a quarterly net profit of QAR 3.2bn.

For the first six months of 2016, the bank’s net profit rose 12 per cent from a year earlier to QAR 6.2bn, it said.

Government spending on infrastructure and projects linked to the 2022 soccer World Cup has been a major source of credit growth in Qatar in recent years.

Still, banks are having to adjust to slimmer state spending this year after the government tightened its budget against a backdrop of lower oil prices.

The completion of the Finansbank acquisition helped boost QNB’s net interest income to QAR 5.61bn at June 30, up from QAR 3.21bn a year earlier. Net income from fees and commission swelled to QAR 1.27bn over the same period, compared to QAR 582.16m a year ago.

Deposits at the lender stood at QAR 488bn by June 30, up by 29 per cent from the same point in 2015.

In a bid to strengthen the bank’s capital adequacy ratio and support future growth, QNB last month raised QAR 10bn of Tier 1 capital through a private placement of perpetual notes, the largest such issue ever conducted in the Middle East and Africa.

QNB’s total capital adequacy ratio, a combination of both Tier 1 and 2 capital and a key indicator of the bank’s health, stood at 14.2 per cent as at June 30, above the 13.1 per cent level QNB has to meet as part of its status as a domestically systemically important bank.

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