Home japan financial crisis Qatar National Bank profits fall 16% as loan loss provisions rise

Qatar National Bank profits fall 16% as loan loss provisions rise

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DUBAI (Reuters) – Qatar National Bank, the Gulf’s largest bank by assets, on Tuesday announced a drop in annual profit of more than 16%, hit by $ 1.6 billion in write-downs over the course of ‘a year in which the region’s economy was hit by the coronavirus epidemic.

Gulf banks have faced a slowdown in business and increased loan write-downs as Covid-19 hit the region. The outlook for 2021 is uncertain due to the protracted nature of the economic recovery.

QNB reported net profit of 12 billion Qatari riyals ($ 3.30 billion) in 2020, it said in a statement, up from 14.4 billion riyals in 2019.

Profit was slightly above the average forecast of 11.7 billion riyals by seven analysts, based on data from Refinitiv.

“Given the long-term financial impacts of Covid-19, the QNB group decided to set aside an additional 5.8 billion (riyals) for loan loss provisions, a precautionary measure, which affected profit. net of the year, ”the bank said. In 2019, write-downs amounted to approximately 3.2 billion riyals.

Qatar’s economy is expected to grow 3% this year, as easing a three-year-old regional dispute will help trade, tourism and logistics, Standard Chartered said on January 6, revising its previous growth estimate. 2.1%.

Saudi Arabia and its Arab allies agreed earlier in January to end a boycott imposed in mid-2017 over allegations that Qatar supports terrorism, charges it has denied.

Qatar’s economy is expected to contract by around 2.5% in 2020, the International Monetary Fund said.

Despite the pandemic, QNB said its total assets reached a record 1,000 billion riyals, thanks to a 7% increase in loans and advances.

QNB improved its cost-to-income ratio from 25.9% to 24.3%, which the bank says is considered one of the highest ratios among large financial institutions in the Middle East region and of Africa.

(The story is passed on to fix the conversion rate in the third paragraph.)

Reporting by Saeed Azhar, editing by Louise Heavens and Jane Merriman


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