Bloomberg News

Qatar National Quarterly Net Surges 31% on Interest Income

October 05, 2011

(Updates with analysts’ comment in third, sixth paragraphs.)

Oct. 5 (Bloomberg) -- Qatar National Bank SAQ, the Persian Gulf country’s biggest bank by assets, posted a 31 percent gain in third-quarter profit on higher income from lending.

Net income rose to 1.9 billion riyals ($522 million), or 3.2 riyals a share, from 1.45 billion riyals, or 2.7 riyals, a year earlier, the Doha-based lender said today in an e-mailed statement. That beat the 1.78 billion-riyal median estimate of three analysts surveyed by Bloomberg.

The results are “very strong, with sequential quarterly growth that many banks would envy if they book it in a full year,” Jaap Meijer, head of the banks team at AlembicHC Securities, said in an e-mail. Qatar National is AlembicHC’s top pick with the best capital and growth, strong liquidity and return on risk-weighted assets, he said.

Qatar, the world’s biggest exporter of liquefied natural gas, forecasts its economy to expand by about 16 percent this year, helped by fuel exports. The country will invest about $88 billion in infrastructure for the 2022 soccer World Cup, Enrico Grino, Qatar National’s head of project finance, said in May.

Nine-month profit jumped 30 percent to 5.4 billion riyals, the bank said. Lending rose 28 percent in the nine months through September to 168 billion riyals, while interest income and from Islamic financing gained 32 percent from a year earlier to 1.9 billion riyals. Provisions for bad loans more than doubled to 250.4 million riyals.

Bad Loans

Qatar National’s ratio of non-performing loans to gross loans rose to 1.07 percent in the quarter “and the trend is in line with our expectation of 1.14 percent” for the year, said Naresh Bilandani, an analyst at JPMorgan Cazenove, in a report. “The bank’s asset-quality metrics remain among the best in Central, Eastern Europe, Middle East and Africa.”

The state-controlled lender said Aug. 29 it set up a $7.5 billion-euro medium-term note program and hired Barclays Plc, HSBC Holdings Plc and QNB Capital to manage the sale. The money raised would be used for “normal operations,” it said.

Qatar National also raised 12.7 billion riyals from a one- share-for-four rights offer in May, which was fully subscribed. The issue was aimed at boosting core capital and help Qatar National become the biggest Gulf Arab lender over the next three to five years, it said then.

The shares closed unchanged at 139.5 riyals today before the results were announced. The stock has gained 5 percent this year, compared with a 1.7 percent decline in the Qatar Exchange’s banking sector index.

--Editors: Stephen Taylor, Jon Menon

To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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