03 February 2008
For the year ended December 31, 2007, Qatar National Bank (QNBK) reported a jump of 25.5% in net profits to QR2.51 billion from QR2.00 billion in 2006. As a result of substantial growths in all its income components, total operating income reached QR3.72 billion, up by QR827.36 million or 28.6%. The bank's interest income grew 36.1% to QR4.62 billion from QR3.40 billion. However, interest expenses escalated 59.1% to QR2.86 billion from QR1.79 billion, restricting net interest income growth to 10.2%.
Meanwhile, QNBK registered moderate increase in its non-interest income components. Net fees & commission income surged 60.3% to QR0.73 billion from QR0.45 billion, while net gain from dealing in foreign currency ascended 49.6% to QR0.18 billion from QR0.12 billion in FY06 and income from Islamic financing improved 50.5% to QR0.42 billion.
For 2007, QNBK's total assets expanded a handsome 59.6% to QR114.36 billion and customers' deposits increased by 42.8% to QR 74.18 billion. Simultaneously, loans and advances grew 42.9% to QAR 66.06 billion, with maximum lending to government agencies (29.9%). Its Islamic banking unit, Al Watani Al Islami, also registered an exciting 125% increase in its financing operations to QR4.50 billion. Further, the bank completed its first phase of rights issue in November 2007, involving the issuance of 1 share for every 8 shares held at a price of QR120 per share. Additionally, the board has proposed a 50% cash dividend and a 20% bonus issue.
Established in 1964, QNBK is not only the largest bank in Qatar, but also controls more than half of the country's total banking industry. The bank provides an array of services including retail, corporate, treasury, investment & wealth management, and Islamic banking services. In addition to being heavily involved in project financing, QNBK is also a leading bank in issuance management, and operates from its head office in Doha. The bank is listed on the Doha Securities Market (DSM), and 50% of its ownership lies with the Qatar Investment Authority and the remaining 50% rests with the public.
QNBK has the largest distribution network with 42 branches/offices and 130 ATMs. It is expanding its international presence with new facilities in Singapore, Libya, Oman, Kuwait and Yemen, in addition to existing branches in London and Paris, and a representative office in Iran. It was the first commercial bank to offer Islamic banking products and services, and also the first Qatari bank to launch equity funds for companies listed on the DSM. In June 2007, QNBK was named the "Best Bank in Qatar" by the international finance magazine Euromoney.
With Qatar's Gross Domestic Product (GDP) increasing threefold since 1995 and expected to hit between $100 -$120 billion by 2015, Qatar is now recognized as one of the largest and potentially lucrative markets not just in the Gulf, but globally. Further, fuelled by the buoyant regional economic environment and driven by historically high oil and gas prices, Qatari banks have been enjoying robust results.
Currently, the total number of banks operating in Qatar stand at 42. Of this, 10 are local and seven are foreign banks. In addition, another 25 banks are registered with the Qatar Financial Centre (QFC).
On January 27, 2008, QNBK formed an alliance with Qatar Islamic Bank, Barwa Real Estate, QInvest and Sellar Property Group (London), to finance the GBP 2 billion 'Shard of Glass' tower project (London). The bank will have a 20% stake in the project. On January 21, 2008, as part of its ambitious overseas expansion strategy, QNBK announced that it would set up more operations outside the country. The lender revealed plans to invest as much as $250 million in Syria and Sudan. In the same month, it bought a 20% stake in Al Jazeera Islamic Co. In the last week of December 2007, QNBK launched its Kuwaiti and Omani operations - the first Qatari bank to enter these markets. It also signed an agreement with the Qatar Tennis Federation (QTF) to be the official sponsor of the tennis tournaments organized by the Association of Tennis Professionals (ATP) in Doha. Along with 15 other institutions, the lender agreed to provide a corporate loan of $1.1 billion to Qatar Fertilizer Co. to set up its fifth production line - Qafco 5 at Mesaieed.
In November 2007, QNBK received approval to set up branches in Mauritania offering commercial and Islamic banking services. On November 05, 2007, along with ABN AMRO Bank, Barclays Capital, BNP Paribas, DBS Bank Ltd, and The Royal Bank of Scotland, the bank announced the successful closure of Qatar Telecom's $3 billion syndicated term loan facility. In October, in cooperation with Finance House, QNBK entered a $37.2 million agreement to finance Ithmar Capital's acquisition vehicle, intended to invest in the construction and building industry. On October 28, 2007, the bank signed a deal with the Qatar National Olympic Committee (QNOC), for the second year in a row, to sponsor major sports championships in the country. On the same day, the bank's EGM approved a capital increase via a rights issue in two phases - the first phase ran from November 04 till November 18 2007, while the second phase is scheduled from April 06 to April 20, 2008. Again in October, QNBK launched a new priority banking service 'QNB First', to provide eligible customers a unique and convenient banking experience that recognizes their status and busy schedule. QNBK also acted as a co- arranger along with Commercial Bank of Kuwait, Standard Chartered, and HSBC, to provide an $53 million loan to Kuwait's Al Deera Holding Co.
In late September 2007, the bank started its Yemeni operations through its Sana branch. Meanwhile, on September 24, it increased its stake in the capital of Jordan-based Housing Bank for Trade & Finance (HBTF) to 30% from 20% earlier, for a total value of QAR 709 million. Further, the bank successfully closed a syndicated term loan facility of $1.85 billion arranged by a group of international banks and financial institutions. The facility, which has a five-year maturity, was initially mandated at $1.6 billion and was later raised to $1.85 billion. It will be used for general funding purposes. Finally, in partnership with HSBC, Gulf International Bank (Bahrain), and Standard Chartered it signed a $3 billion loan agreement with the Qatari Investment Authority for the latter's investment purposes.
QNBK witnessed robust growth in its financials during the period 2003-2007. Its net profits increased by a CAGR of 39.2%, as it moved to QR2.5 billion in 2007 from QR667 million in 2003. Nearly 95% of the bank's 2007 earnings came from its core banking operations, reflecting its strong fundamentals.
Presently, QNBK has operations in about 20 countries with full-scale branches in London, Paris, Oman, Yemen and Kuwait. QNBK also has a 30.5% stake in Jordan's Housing Bank for Trade & Finance. Further, it has also entered into an agreement with some strategic partners to establish a bank in Syria in which it will hold a 49% stake; it has already obtained the approval to establish a branch in Mauritania. With QNBK expanding its international operations in a big way, about 25% of the bottom-line would come from business abroad in the medium term.
In the year 2007, the bank launched various new products and services, including the new priority banking service 'QNB First', business banking services, the EAZYlife service, which offers a range of e-banking services 24 hours a day through the internet. Furthermore, QNBK is the first bank in Qatar to launch Portfolio Management Services covering markets in the GCC. The bank also established a corporate advisory unit providing investment banking capabilities to major corporates, complimenting the needs of the growing local economy and the increasing volume of projects. Currently, QNBK is the highest rated bank in Qatar with the widest coverage from leading rating agencies such as Moody's, Standard & Poor's, Fitch, and Capital Intelligence. During 2007, the bank's rating was upgraded due to its strong capitalization, sound asset quality, dominant position in the financial sector, and its track record of strong financial performances.
QNBK's stock has gained 3.2% from the beginning of this year, as against a fall of 0.3% in the Doha index, displaying an ability to out- perform the Index. Presently, the stock is trading at a P/E of 16.32 and a P/B of 2.95, making it an attractive investment proposition. The bank's sound fundamentals along with its aggressive approach towards expansion hold good prospects ahead. Therefore, we reiterate our overweight opinion on the stock.
For the year ended December 31, 2007, Qatar National Bank (QNBK) reported a jump of 25.5% in net profits to QR2.51 billion from QR2.00 billion in 2006. As a result of substantial growths in all its income components, total operating income reached QR3.72 billion, up by QR827.36 million or 28.6%. The bank's interest income grew 36.1% to QR4.62 billion from QR3.40 billion. However, interest expenses escalated 59.1% to QR2.86 billion from QR1.79 billion, restricting net interest income growth to 10.2%.
Meanwhile, QNBK registered moderate increase in its non-interest income components. Net fees & commission income surged 60.3% to QR0.73 billion from QR0.45 billion, while net gain from dealing in foreign currency ascended 49.6% to QR0.18 billion from QR0.12 billion in FY06 and income from Islamic financing improved 50.5% to QR0.42 billion.
For 2007, QNBK's total assets expanded a handsome 59.6% to QR114.36 billion and customers' deposits increased by 42.8% to QR 74.18 billion. Simultaneously, loans and advances grew 42.9% to QAR 66.06 billion, with maximum lending to government agencies (29.9%). Its Islamic banking unit, Al Watani Al Islami, also registered an exciting 125% increase in its financing operations to QR4.50 billion. Further, the bank completed its first phase of rights issue in November 2007, involving the issuance of 1 share for every 8 shares held at a price of QR120 per share. Additionally, the board has proposed a 50% cash dividend and a 20% bonus issue.
Established in 1964, QNBK is not only the largest bank in Qatar, but also controls more than half of the country's total banking industry. The bank provides an array of services including retail, corporate, treasury, investment & wealth management, and Islamic banking services. In addition to being heavily involved in project financing, QNBK is also a leading bank in issuance management, and operates from its head office in Doha. The bank is listed on the Doha Securities Market (DSM), and 50% of its ownership lies with the Qatar Investment Authority and the remaining 50% rests with the public.
QNBK has the largest distribution network with 42 branches/offices and 130 ATMs. It is expanding its international presence with new facilities in Singapore, Libya, Oman, Kuwait and Yemen, in addition to existing branches in London and Paris, and a representative office in Iran. It was the first commercial bank to offer Islamic banking products and services, and also the first Qatari bank to launch equity funds for companies listed on the DSM. In June 2007, QNBK was named the "Best Bank in Qatar" by the international finance magazine Euromoney.
With Qatar's Gross Domestic Product (GDP) increasing threefold since 1995 and expected to hit between $100 -$120 billion by 2015, Qatar is now recognized as one of the largest and potentially lucrative markets not just in the Gulf, but globally. Further, fuelled by the buoyant regional economic environment and driven by historically high oil and gas prices, Qatari banks have been enjoying robust results.
Currently, the total number of banks operating in Qatar stand at 42. Of this, 10 are local and seven are foreign banks. In addition, another 25 banks are registered with the Qatar Financial Centre (QFC).
On January 27, 2008, QNBK formed an alliance with Qatar Islamic Bank, Barwa Real Estate, QInvest and Sellar Property Group (London), to finance the GBP 2 billion 'Shard of Glass' tower project (London). The bank will have a 20% stake in the project. On January 21, 2008, as part of its ambitious overseas expansion strategy, QNBK announced that it would set up more operations outside the country. The lender revealed plans to invest as much as $250 million in Syria and Sudan. In the same month, it bought a 20% stake in Al Jazeera Islamic Co. In the last week of December 2007, QNBK launched its Kuwaiti and Omani operations - the first Qatari bank to enter these markets. It also signed an agreement with the Qatar Tennis Federation (QTF) to be the official sponsor of the tennis tournaments organized by the Association of Tennis Professionals (ATP) in Doha. Along with 15 other institutions, the lender agreed to provide a corporate loan of $1.1 billion to Qatar Fertilizer Co. to set up its fifth production line - Qafco 5 at Mesaieed.
In November 2007, QNBK received approval to set up branches in Mauritania offering commercial and Islamic banking services. On November 05, 2007, along with ABN AMRO Bank, Barclays Capital, BNP Paribas, DBS Bank Ltd, and The Royal Bank of Scotland, the bank announced the successful closure of Qatar Telecom's $3 billion syndicated term loan facility. In October, in cooperation with Finance House, QNBK entered a $37.2 million agreement to finance Ithmar Capital's acquisition vehicle, intended to invest in the construction and building industry. On October 28, 2007, the bank signed a deal with the Qatar National Olympic Committee (QNOC), for the second year in a row, to sponsor major sports championships in the country. On the same day, the bank's EGM approved a capital increase via a rights issue in two phases - the first phase ran from November 04 till November 18 2007, while the second phase is scheduled from April 06 to April 20, 2008. Again in October, QNBK launched a new priority banking service 'QNB First', to provide eligible customers a unique and convenient banking experience that recognizes their status and busy schedule. QNBK also acted as a co- arranger along with Commercial Bank of Kuwait, Standard Chartered, and HSBC, to provide an $53 million loan to Kuwait's Al Deera Holding Co.
In late September 2007, the bank started its Yemeni operations through its Sana branch. Meanwhile, on September 24, it increased its stake in the capital of Jordan-based Housing Bank for Trade & Finance (HBTF) to 30% from 20% earlier, for a total value of QAR 709 million. Further, the bank successfully closed a syndicated term loan facility of $1.85 billion arranged by a group of international banks and financial institutions. The facility, which has a five-year maturity, was initially mandated at $1.6 billion and was later raised to $1.85 billion. It will be used for general funding purposes. Finally, in partnership with HSBC, Gulf International Bank (Bahrain), and Standard Chartered it signed a $3 billion loan agreement with the Qatari Investment Authority for the latter's investment purposes.
QNBK witnessed robust growth in its financials during the period 2003-2007. Its net profits increased by a CAGR of 39.2%, as it moved to QR2.5 billion in 2007 from QR667 million in 2003. Nearly 95% of the bank's 2007 earnings came from its core banking operations, reflecting its strong fundamentals.
Presently, QNBK has operations in about 20 countries with full-scale branches in London, Paris, Oman, Yemen and Kuwait. QNBK also has a 30.5% stake in Jordan's Housing Bank for Trade & Finance. Further, it has also entered into an agreement with some strategic partners to establish a bank in Syria in which it will hold a 49% stake; it has already obtained the approval to establish a branch in Mauritania. With QNBK expanding its international operations in a big way, about 25% of the bottom-line would come from business abroad in the medium term.
In the year 2007, the bank launched various new products and services, including the new priority banking service 'QNB First', business banking services, the EAZYlife service, which offers a range of e-banking services 24 hours a day through the internet. Furthermore, QNBK is the first bank in Qatar to launch Portfolio Management Services covering markets in the GCC. The bank also established a corporate advisory unit providing investment banking capabilities to major corporates, complimenting the needs of the growing local economy and the increasing volume of projects. Currently, QNBK is the highest rated bank in Qatar with the widest coverage from leading rating agencies such as Moody's, Standard & Poor's, Fitch, and Capital Intelligence. During 2007, the bank's rating was upgraded due to its strong capitalization, sound asset quality, dominant position in the financial sector, and its track record of strong financial performances.
QNBK's stock has gained 3.2% from the beginning of this year, as against a fall of 0.3% in the Doha index, displaying an ability to out- perform the Index. Presently, the stock is trading at a P/E of 16.32 and a P/B of 2.95, making it an attractive investment proposition. The bank's sound fundamentals along with its aggressive approach towards expansion hold good prospects ahead. Therefore, we reiterate our overweight opinion on the stock.
© Bahrain Tribune 2008
