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Qatar's biggest bank says crisis has minimal impact on business
[DUBAI] Qatar National Bank QPSC said it expects to meet its earnings targets as the ongoing Saudi-led campaign to isolate the gas-rich Arab state has minimal impact on its operations.
The Middle East's largest lender by assets is confident it will reach its net profit growth target of 6 per cent to 8 per cent in the second quarter, the same guidance given to investors in March, according to a senior official at the bank who asked not to be identified because of company policy.
QNB has a good capital base, diversified funding sources and one of the best cost-to-income ratios so the standoff isn't impacting the bank's ability to get funding from the international market, the official said.
Qatari lenders are coming under pressure after Saudi Arabia, Bahrain, Egypt and the United Arab Emirates cut diplomatic relations and closed transport routes three weeks ago. Some banks in these countries cut their exposure to Qatar amid concern of a widening of the blockade, while lenders in the country are boosting interest rates on dollar deposits to shore up liquidity, people familiar with the matter said.
QNB shares have fallen 13 per cent since the standoff started on June 5, more than the 10 per cent drop for Qatar's main stock gauge. QNB is the index's biggest member with a weighting of about 17 per cent.
Only 4 per cent of QNB's deposits come from the Gulf states involved in the blockade and the bank has seen minimal withdrawals, the official said. The Qatari government and local investors started injecting cash at the beginning of the year, he said.