QNB reports 8 per cent profit rise in 2015

Qatar National Bank (QNB), the Middle East’s largest commercial bank in terms of assets, said that its net profit for 2015 as a whole rose by 8 per cent to QR 11.26bn on higher operating income and lower loan provisions.

“Overall (this was a) good set of results with the exception of weaker-than-expected non-interest income,” NBK Capital said in a commentary about QNB’s performance. “Loan growth was very high while the quarter-on-quarter increase in the cost of funds is minimal given the tightening liquidity situation in the Qatari banking sector. On the other hand, provisioning continues to be very low.”

NBK capital said it was maintaining its fair value and buy recommendation on the stock.

QNB recorded a net profit of QR 2.54 billion in the fourth quarter of 2015. This was 4 per cent up on the same quarter of 2014 due to lower provisioning. Operating income in the quarter fell by 1 per cent year-on-year

“Loan provisioning stood at QR 200 million in the fourth quarter (cost of risk 21 bps), which is significantly below the last quarter of 2014,” NBK Capital said. “For (the year as a whole), loan provisioning plummeted by 61 per cent to stand at QR 433 million (cost of risk 12 bps).”

Lending grew by 15 per cent in 2015. The loans-to-deposits ratio stood at around 98 per cent at the end of 2015.

QNB has recommended a dividend per share reduction and an increase in capital through Tier I or Tier 2 capital instruments.