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Wed 9 Apr 2014 03:35 PM

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Qatar's QNB posts 13% jump in Q1 net profit

Qatar National Bank, the largest lender in the Gulf region, posts profits on nearly $660m in three-month period

Qatar's QNB posts 13% jump in Q1 net profit

Qatar National Bank, the largest bank in the Gulf Arab region, said on Wednesday its first-quarter net profit rose 13.7 percent partly from strong loan growth related to extensive construction spending in Qatar.

The bank reported a net profit of QR2.43 billion ($667.4 million) for the first three months of 2014, a company statement said.

This was broadly in line with the average forecast of analysts polled by Reuters, who expected a net profit of QR2.45 billion for the quarter.

Lending growth in Qatar has been a major driver of banks' profits in recent quarters and is expected to remain high for the medium term as the Gulf Arab state spends billions of dollars on infrastructure and preparations to host the soccer World Cup in 2022.

Qatar National Bank itself has estimated that projects worth around $205 billion will be announced in the 2013-2018 period.

The bank reported a 26.2 percent year-on-year increase in operating income, with net interest income up 25.7 percent over the same timeframe.

Loans and advances, a key component of net interest income, stood at QR317.1 billion at the end of March, up 22.5 percent year-on-year, the statement said.

This outstripped the 17 percent total credit growth across the banking sector in February, according to the latest central bank data.

Deposit growth also continued to be strong, with the total held by the bank at QR345.6 billion on March 31, up 23.4 percent.

The bank, which is 50-percent owned by sovereign wealth fund Qatar Investment Authority, is aiming to become the largest bank in the Middle East and Africa by 2017, its finance head Ramzi Mari told Reuters in February.

The bank, which completed the purchase of Societe Generale's Egyptian business last March, wants its international business to contribute around 40 percent of profit by then, Mari said at the time.

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