Qatar's largest bank has delivered a major increase in profits for the final quarter of last year from a year earlier, in sharp contrast to most other Gulf lenders, which have so far reported earnings marred by mounting provisions. Qatar National Bank (QNB) posted a 64 per cent rise in net profits in the fourth quarter, helped by rising loans and deposits. Its performance reflects the comparatively healthy performance of the country's economy, which is expected to grow as much as 14 per cent this year as a result of increases in gas exports and government spending.
Fourth-quarter profit rose to 1.07 billion rials (Dh1.08bn) from 650 million rials a year earlier, calculations by The National show. In the full year, the bank's net profit rose 15 per cent to 4.2bn rials, largely in line with analysts' expectations. Ali Shareef al Emadi, the chief executive of QNB, said the results were proof of the bank's "strong growth across all activities while effectively managing its risks".
Banks in the Emirates are expected to report mixed fourth-quarter earnings as lenders exposed to Dubai World's debt will have to make fresh provisions. UAE banks are also suffering from sluggish demand for loans, while most Saudi lenders have so far reported profit declines for the last quarter. Samba, Saudi Arabia's second-largest bank, said this week its loan portfolio dropped by 14 per cent, or 84bn riyals (Dh82.27bn), over the course of last year. Banque Saudi Fransi, Saudi Arabia's fifth-largest lender, saw its fourth-quarter net profit fall 43 per cent compared with the same period a year earlier, while Saudi Hollandi Bank posted a loss of 440m riyals in the final quarter of last year.
Qatar has been widely lauded for acting early to protect banks during the financial crisis, when liquidity dried up and property prices declined. The government helped banks clear their balance sheets of troubled assets by buying some equity and property portfolios from them. So far, it has spent 6.5bn rials on the programme and plans to lay out 900m rials more, said Youssef Hussein al Kamal, the finance minister. Qatar also bought 10 per cent of bank shares.
Despite suffering declines in property values after parts of the market overheated in 2008, Qatari banks carry comparatively few non-performing loans on their books. QNB's non-performing loans ratio stood at 0.7 per cent of gross loans. That figure ranges between 2.5 and 4 per cent for many Dubai banks. Credit Suisse estimates Qatar's economy will grow by as much as 14.2 per cent this year. Exports of liquefied natural gas alone could earn US$28bn (Dh102.84bn), up almost 50 per cent from last year, the bank says.