Moody’s raises QNB’s Rating Outlook to Positive
Moody's Investors Service has changed Qatar National Bank (QNB)’s Financial Strength Rating (FSR) outlook to Positive from Stable. The bank’s A3/Prime-2 foreign currency deposit outlook remains unchanged at stable.
Sustained good financial performance should put upward pressure on the FSR, concludes Moody's. The rating action recognizes the bank's good financial fundamentals and the improving operating conditions in Qatar.
A strong interrelationship with the State of Qatar including a 50 percent ownership endows the bank with the lion's share of state-related business, turning QNB into the largest financial institution in Qatar with a market share of about 50 percent of total banking assets.
The bank's dominant franchise is underpinned by preferential access to state-related business in an operating environment where the state is, and is expected to be for the coming years, the main economic agent, according to Moody’s.
Moreover, the bank enjoys a satisfactory earning power, reflecting a very low cost base, says Moody's. In terms of interest margins, QNB compares unfavorably with its peers that tend to report wider interest spreads. The bank's FSR is also supported by its ample capital and its good asset quality, with a low level of problematic loans.
Headquartered in Doha, Qatar, QNB had consolidated assets of 31.1 billion Qatari riyals ($8.5 billion) in December 2002. — (menareport.com)
© 2003 Mena Report (www.menareport.com)