S&P: “We consider QNB a highly systemically important bank in Qatar because of its dominant market share and its role in financing the country's economy”
Capital Intelligence: “QNB’s ratings capture its excellent asset quality, strong profitability and high quality earnings, good liquidity, very capable professional management team and solid franchise.”
Doha, 3 April 2010 – Qatar National Bank’s (QNB) ratings have been affirmed by two leading ratings agencies, Standard & Poor’s (S&P) and Capital Intelligence (CI).
S&P affirmed QNB’s rating of ‘A+’ for the long term and ‘A1’ for the short term, with a ‘Stable’ outlook. CI affirmed the Bank’s long-term foreign currency rating of ‘AA-’, its short-term foreign currency rating of ‘A1+’ and its financial strength rating of ‘A+’, with a ‘Stable’ outlook on all ratings.
The affirmation of QNB’s ratings by both ratings agencies accompany a challenging global financial environment which has continued to put pressure on banks ratings across the world, demonstrating the quality of QNB’s credit portfolio, as well as the Bank’s ability to effectively manage risk across the breadth of its activities.
S&P referred to QNB in its report as Qatar’s Flagship Bank and said the ratings reflect QNB’s high systemic importance and 50% ownership by the State of Qatar’s sovereign fund, the Qatar Investment Authority.
S&P said in its report that QNB is a systemically important bank in Qatar because of its dominant market share and its role in financing the country's economy. S&P also said that QNB's size gives it a competitive advantage in corporate banking and the capital base to take part in big-ticket deals. In S&P’s view, QNB’s operating environment is strong and benefits from the bank’s solid domestic entrenchment, increasing business volumes, high asset quality, and efficiency.
Capital Intelligence said in a statement that QNB’s ratings capture its excellent asset quality, strong profitability and high quality earnings, good liquidity, very capable professional management team and solid franchise.
QNB was able to deliver outstanding financial results for 2009 with Net Profit exceeding QR4.2 billion, representing an increase of 15% over 2008, despite the economic and financial crisis that faced many countries around the world, reaffirming QNB’s leading position domestically and internationally.
QNB recorded growth across all financial indicators in 2009 with Total Assets increasing by 18% to reach QR179.3 billion, while customer deposits and unrestricted investment accounts increased by 20.7% to reach QR125.9 billion. Loans and advances and financing activities grew by 8.7% to reach QR108.8 billion.
Maintaining the quality of its assets and credit portfolio has always been a significant focus area for QNB. The Bank was able to maintain its non-performing loans ratio at 0.7% of gross loans at 31 Dec 2009, clearly demonstrating success in maintaining the high quality of its loans portfolio through effective risk management.
QNB has a separate risk-management unit which constantly monitors all major types of risks. In addition, the Board of Directors carefully documents and approves policies for measuring and mitigating different types of risk.
S&P said in its latest ratings update: “The risk culture across the organization is well developed. QNB keeps its risk appetite at what we regard as manageable levels to protect its franchise and brand.”
As a result of QNB’s overall performance, total shareholders’ equity at 31 December 2009 reached QR19.8 billion, up by 18.9% from the prior year. The increase in net profit resulted in an increase in earnings per share to QR14.0, from QR12.3 in 2008.
During 2009, QNB also played instrumental roles in bond issues worth a cumulative US$10 billion, including the $7 billion government bond issue in November 2009. Given QNB’s experience in managing Initial Public Offerings (IPO), the Bank’s investment banking subsidiary QNB Capital was appointed a Joint Lead Manager and Financial Adviser to Vodafone Qatar's IPO in 2009.
QNB also continued to focus on service innovation to support the growth of its domestic and international banking network. In 2009, the Bank launched a series of service enhancements to its retail banking portfolio, including competitive new products and the elimination or reduction of fees and tariffs applicable to many offerings.
The Bank also launched QNB Note 1, an innovative capital protected note that is linked to selected stocks listed on the Qatar Exchange. The Bank is one of the largest fund managers in the region with assets under management exceeding QR10.2 billion at the end of 2009.
In the past year, QNB extended its domestic branch network by three branches, and its international network with the commencement of operations in Damascus of QNB-Syria which is 49% owned by QNB, and the official opening of its Swiss private banking subsidiary QNB-Switzerland which is wholly owned by QNB.
