Qatar National Bank's 2019 net profit beats forecast with 4% rise

(Reuters) - Qatar National Bank QNBK.QA, the Gulf's biggest lender by assets, posted a 4% rise in annual profit on Tuesday, beating analysts' forecasts, as earnings were boosted by double-digit growth in loans.

FILE PHOTO: Cars drive past the building of Qatar National Bank (QNB) in Doha, Qatar, June 11, 2017. REUTERS/Naseem Zeitoon /File Photo

The bank reported a net profit of 14.4 billion riyals ($3.95 billion) in 2019, up from 13.8 billion riyals a year earlier, it said in a statement. That was above a mean forecast of 13.9 billion riyals from a Refinitiv poll of analysts.

QNB’s fourth-quarter profit rose to 3.2 billion riyals, according to Reuters calculations, from 3 billion riyals a year earlier. Analysts at EFG Hermes had also forecast a quarterly net profit of 3.2 billion riyals.

The bank, which is 50% owned by Qatar’s sovereign wealth fund Qatar Investment Authority, said loans and advances grew 10% in 2019 from a year earlier, while customer deposits also rose at the same pace.

It will distribute 0.6 riyals per share cash dividend to its shareholders, it said.

“The group’s drive for operational efficiency is yielding cost-savings in addition to sustainable revenue generating sources,” the bank said in a statement.

“This helped QNB Group to maintain a strong efficiency (cost to income) ratio of 25.9%, which is considered one of the best ratios among large financial institutions in the (Middle East and Africa) region.”

Qatar has largely shrugged off attempts by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt to put pressure on its economy after they cut diplomatic and transport ties in 2017.

Qatari banks have since widened their sources of funding, opting for private placements in different currencies alongside more traditional public bond issues.

QNB received regulatory approval for its first Hong Kong branch in September, part of a plan to boost international operations.

The lender is the country’s largest bank, accounting for about 45% of domestic loans and deposits, according to Fitch Ratings. It has a presence in more than 31 countries across Middle East and North Africa, Asia and Europe.

Reporting by Eric Knecht and Saeed Azhar; Editing by Davide Barbuscia and Jan Harvey