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By Tom Arnold
DUBAI, April 10 (Reuters) - Qatar National Bank (QNB), the largest bank in the Middle East and Africa by assets, reported a 7 percent increase in first-quarter net profit, propelled by a double-digit jump in loan growth.
Net profit rose to 3.4 billion riyals ($933.9 million) for the three months to March 31.
That was broadly in line with the forecasts of two analysts polled by Reuters. SICO Bahrain forecast the bank would make a net profit of 3.4 billion riyals, while EFG Hermes had expected a net profit of 3.5 billion.
QNB has been the prime beneficiary of a massive outlay in public spending in recent years as Qatar prepares to improve infrastructure and host the 2022 World Cup. Still, the government is projected to grow total spending only slightly in 2018.
QNB aims to increase its profit by 5 to 8 percent this year and loans and investments by 10 to 12 percent, helped by expansion into faster-growing Southeast Asia markets, its chief executive told Reuters last week.
During the first quarter, QNB’s loans and advances reached 598 billion riyals, up by 12 percent from the same period of last year.
But the bank is targeting potential acquisitions in Southeast Asia as it continues to focus on growing its business in faster-growing markets outside Qatar.
QNB in 2016 completed the takeover of Turkey’s Finansbank and also owns a business in Egypt and a 23.5 percent stake in pan-African lender Ecobank International.
The bank said it was able to attract more deposits during the quarter, which boosted customer funding by 12 percent from a year earlier.
Qatari banks have been given infusions of cash from public sector deposits in recent months to help counter any outflows as a result of the diplomatic crisis that erupted in June last year between Qatar and Saudi Arabia, United Arab Emirates, Bahrain and Egypt.
QNB, which is 50 percent owned by sovereign wealth fund Qatar Investment Authority, has found alternative sources of funding since then. In addition to issuing Australian dollar bonds and Formosa bonds, it completed $2.5 billion of private placements and a $3.5 billion syndicated loan during the first quarter.
QNB had no plans to issue public U.S. dollar bonds in the near future, group chief executive Ali Ahmed al-Kuwari told Reuters last week. (Reporting by Tom Arnold; editing by Jason Neely and David Evans)