(Bloomberg) --
Qatar National Bank posted a 26% drop in quarterly profit after raising loan-loss provisions, a sign of things to come from Middle East companies during the current earnings season.
The region's biggest lender raised impairments to 1.5 billion riyals ($410 million) in the second quarter compared with 606 million riyals a year ago. Provisions were increased to “protect the group from any adverse shocks in the loan book,” affecting profitability, it said.
Banks in the six-member Gulf Cooperation Council face an “earnings shock” from the plunge in oil prices and the coronavirus pandemic, S&P Global Ratings said in April. The crisis is also prompting a new wave of consolidation talk among banks in the Middle East, including two from Qatar.
Qatar National Bank said in response to current economic conditions it renewed operational rationalization, helping it to improve cost-to-income ratio to 24.5% from 25.6%.
QNB 2Q numbers:
- Profit 2.82 billion riyals vs 3.8 billion
- Operating income 6.09 billion riyals vs 6.22 billion riyals
- Net interest income 5.08 billion riyals vs 5 billion
- Net fees and commission income 670 million riyals vs 900 million
- Total assets 972 billion riyals at end June
- NPL ratio 2.0%
- Link to financial statement
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