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Three of Qatar’s major banks have reported third quarter earnings results for 2018, which have thus far been seen as positive by investors, who are still awaiting results from some of the country’s other banks.
“While only three banks have reported so far, they paint an encouraging picture of the Qatar economy. Loan growth and fee income grew modestly in Q3 while nonperforming loans remain well under control,” Akber Khan, senior director of asset management at Al Rayan Investment, told Zawya by email.
“A full set of results from the sector will obviously be needed to draw larger conclusions,” Khan added.
Qatar National Bank (QNB), the largest bank by assets in the Middle East and Africa, reported a Q3 net profit rise of 3.5 percent. A Moody’s report on Qatar’s banking sector published earlier this month ranked QNB as the market leader in Qatar by some distance, with an overall domestic market share of 47 percent, based on loans and deposits under management at the end of 2017.
“QNB reported strong lending book growth in Qatar, up 3.2 percent in the quarter, however its Turkish exposure contracted by 16 percent over the same period due to currency devaluation of the Turkish Lira,” Chiro Ghosh, research manager at investment bank SICO told Zawya.
“Despite a robust performance in local currency, our outlook on Turkey remains skeptical, as we expect to see net interest margin (NIM) contraction and pick-up in delinquencies with the surge in interest rate,” Ghosh added.
QNB, the biggest stock in terms of market capitalisation on the Qatari exchange, gained in value by 1.57 percent on Tuesday, boosting the Qatari index to finish 2.01 percent higher.
The company, which reported its results after the market closed on September 10, has appreciated in value by 42.13 percent since the start of the year. According to data from Refinitiv’s Eikon, two analysts have a ‘buy’ rating on the bank’s stock, three analysts have a ‘hold’ rating, while three analysts have a ‘sell’ rating and one analyst has recommended a ‘strong sell’.
Masraf Al Rayan reported a 4.4 percent rise in Q3 net profit on Monday. On Tuesday, the bank added 1.89 percent in value but has dropped 0.98 percent so far this year after abandoning three-way merger talks with International Bank of Qatar and Barwa Bank in June. It has a 7 percent share of the domestic loans and deposits market, according to the Moody’s report. According to Eikon, two analysts have a ‘hold’ rating on the bank’s stock, while three analysts have a ‘sell’ rating.
Qatar International Islamic Bank reported a 6.9 percent rise in Q3 net profit on Monday. On Tuesday, the bank added 2.47 percent and has gained 8.79 percent for the year. According to data from Eikon, one analyst has a ‘hold’ rating on the bank’s stock, and one analyst has a ‘sell’ rating. It has a 4 percent share of the domestic loans and deposits market, the Moody’s report said.
Other listed Qatari banks are likely to report Q3 earnings before the end of the week.
Elsewhere in the region, Dubai’s index gained 0.55 percent on Tuesday, Abu Dhabi’s index closed mainly flat, Oman’s index dropped 0.2 percent while Kuwait’s index fell 0.65 percent and Bahrain’s index fell 0.32 percent.
At 14:25 GST, Saudi Arabia’s index was mainly flat, while Egypt’s EGX30 was trading 1 percent higher.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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