Fitch upgrades QNB's long-term rating
Fitch Ratings has upgraded Qatar National Bank's (QNB) long-term rating to A- from BBB+. Its short-term, individual and support ratings have been affirmed at F2, B/C and 2 respectively, and the rating outlook is stable.
The upgrade reflects the bank's consistent track record of profitability, sound asset quality and strong capitalization together with its dominant domestic franchise and a shareholding structure that provides strong likelihood of support. These factors are balanced by potential concerns regarding its continued reliance on the domestic economy, in particular government assets and the challenge of diversifying and rebalancing its businesses while maintaining a sound risk profile.
In an economy dependent on government spending, QNB's market share of approximately 50 percent of total assets and deposits combined with its role as principal banker to the government, gives the bank a competitive advantage over other local and foreign banks operating in the country and this is reflected in its consistent financial performance.
QNB was established in 1964 as the country's first commercial bank. The government holds a 50 percent shareholding in the bank, with the remaining 50 percent widely held by Qatari nationals. As Qatar's leading bank, QNB provides retail, corporate, treasury and investment services through a local branch network of 32 branches and two international branches, in London and Paris.
Fitch's support and individual ratings for banks assess how a bank would be viewed if it were entirely independent and could not rely on external support. Its support ratings deal with the question of whether a bank would receive support from its owners or from the state if it were to get into difficulty. These ratings are not debt ratings but rather, respectively, an assessment of the intrinsic strength of a bank and of any level of outside support that may, or may not, be available to it. — (menareport.com)
© 2002 Mena Report (www.menareport.com)