January 16, 2018 / 12:13 PM / 3 months ago

UPDATE 1-Qatar National Bank Q4 profit rises 5.2 pct, below two forecasts

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By Tom Arnold

DUBAI, Jan 16 (Reuters) - Qatar National Bank (QNB) , the Gulf’s largest lender, on Tuesday reported a 5.2 percent increase in fourth-quarter net profit, missing two analysts’ forecasts as provisions for bad loans jumped.

The bank made a net profit of 2.85 billion riyals ($783 million) in the three months to Dec. 31, compared with 2.71 billion riyals in the corresponding period of 2016, Reuters calculated in the absence of a quarterly breakdown.

SICO Bahrain forecast the bank would make a net profit of 3.54 billion riyals, while EFG Hermes expected a net profit of 3.30 billion riyals.

Provisions during the quarter reached 1.05 billion riyals, analysts estimated, roughly triple the level of recent quarters.

The bank did not provide any guidance on quarterly provisions, although banks sometimes set aside more cover for bad loans in the final quarter of the year.

QNB said it made an annual profit of 13.1 billion riyals, up 6 percent from a year earlier.

QNB has been a main beneficiary of strong lending growth in Qatar as the government has continued to push ahead with spending on the 2022 soccer World Cup and other infrastructure despite attempts to put pressure on the economy by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. Those four Arab states cut diplomatic and transport ties with Qatar on June 5.

QNB said loans and advances reached 584 million riyals, up by 12 percent from the same period of last year.

QNB, the largest lender in the Middle East and Africa by assets, 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.

Deposits at the lender, which is 50-percent owned by sovereign wealth fund Qatar Investment Authority, reached 586 billion riyals at the end of 2017, up by 16 percent from the same period of last year.

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.

The bank’s board recommended a cash dividend of 6 riyals per share for 2017, up from the proposal for the previous year of 3.5 riyals per share and a bonus share dividend which would award one free share for every 10 shares currently owned.

QNB has been finding alternative sources of funding over the past six months or so since the diplomatic rift and this month issued a $720 million, 30-year Formosa bond, an issue sold in Taiwan and denominated in a currency other than the Taiwanese dollar. ($1 = 3.6400 Qatar riyals) (Editing by Saeed Azhar and Peter Graff)

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