Qatar National Bank (QNB), the largest lender in the Gulf Arab region, reported a 10.1 percent increase in first-quarter net profit on Wednesday, beating analysts’ expectations, bolstered by higher lending activity.
The bank reported a net profit of 2.7 billion riyals ($741.7 million) for the three months to March 31, compared with 2.4 billion riyals last year, it said in a statement.
Five analysts polled by Reuters on average forecast a net profit of 2.63 billion riyals for the quarter.
Boosting earnings was a 8.9 percent increase in lending, which totalled 345 billion riyals at the end of March.
It is the second successive quarter in which loan growth at the bank has risen, and while it is not at the more-than-20 percent level seen in 2013 and early 2014, it suggests the bank is managing to weather recent weakness in bank credit growth in Qatar, with sector-wide loan growth at its lowest level since 2007 in February.
Public sector lending has stumbled over the past year in Qatar after several years of fast growth linked to spending on the soccer World Cup in 2022.
QNB was expected to be more impacted by this than other Qatari banks in 2015, given it is more reliant on the public sector for lending than other Qatari banks, according to analysts at EFG Hermes.
Net interest income, which includes revenue from lending, rose by 6.7 percent to reach 3.2 billion riyals in the quarter from the same period of last year.
Deposits at the lender, which is 50-percent owned by sovereign wealth fund Qatar Investment Authority, grew 6.8 percent year-on-year to 369 billion riyals at the end of March.
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