Qatar National Bank third-quarter profit rises 5.6 pct

11/10/2017 15:36 AST

Qatar National Bank (QNB), the Gulf's largest lender, on Wednesday reported a 5.6 percent increase in third-quarter net profit, topping two analysts' forecasts, as the bank weathered the impact of a regional diplomatic crisis.

Qatar's banking sector is facing the fallout from a decision by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt on June 5 to cut diplomatic and transport ties with Qatar, a move that has cut off many of Qatari banks' funding sources in the Gulf. The regional rift resulted in some other Qatari banks seeing an initial drop in deposits, while many are now likely to face higher borrowing costs.

QNB reported a net profit of 3.60 billion riyals ($989 million) for the three months to Sept. 30, up from 3.41 billion riyals from the year ago period, the bank's financial statement showed.

That was above EFG Hermes' forecast of 3.46 billion riyals and a SICO Bahrain forecast of 3.51 billion. QNB's net interest income slipped by 1.9 percent to 4.63 billion riyals.

The bank said a 3 percent fall in its net interest income for the nine month period was primarily driven by the devaluation of the Egyptian pound in late 2016.

QNB, which has a presence in more than 31 countries and is the largest bank in the Middle East and Africa by assets, brought Societe Generale's Egyptian business for $2 billion in 2013.

For the first nine months of the year, QNB reported a net profit of 10.3 billion riyals, up 6 percent.

QNB's customer deposits reached 574.32 billion riyals at the end of September, up from 500.52 billion riyals in the same period of last year.

QNB said its success in attracting new customer deposits meant it would be able to comply with a 100 percent cap on banks' loan to deposit ratio, to be enforced by the central bank from the end of 2017. As a result, the bank's loan to deposit ratio reached 100.8 percent at the end of September.

Last month, QNB completed a $630 million Formosa bond issue in Taiwan. QNB said on Wednesday that issuance was part of the bank's ongoing strategy to diversify its funding in terms of type, tenor and geography. ($1 = 3.6400 Qatar riyals)

Reuters