(MENAFN- The Peninsula) By Satish Kanady / The Peninsula
DOHA: The combined profit of Qatar's listed banks rose by 6.7 percent to QR21.29bn in 2017, on year-on- year. The banks' assets increased 9.7 percent to 1.4 trillion during the period, as they stood firm and weathered the blockade storm.
Among the country's eight listed banks, the banking powerhouse QNB recorded the maximum net profit for the year by posting QR13.12bn, followed by QIB (QR2.4bn) and Masraf Al Rayan (QR2.02bn). Doha Bank recorded QR1.1bn, while QIIB reported QR832m and Commercial Bank delivered QR604m, up from the previous year's QR501m, showed KPMG's banking results snapshot for the year 2017.
In terms of growth in assets, QNB led the pack by increasing its assets by 12.7 percent to QR811bn, from the previous year's QR719bn. Masraf Al Rayan's assets rose to QR102.9bn, up from QR91 bn, recording a 12.5 percent increase. QIIB's assets increased by 9.6 percent to QR46.6bn, while QIB saw a 7.5 percent growth. Commercial Bank posted 6.2 percent increase and Doha Bank recorded 3.5 percent growth on year-on-year.
Qatar's banking system has given a positive message to the market in the post-June (read post-blockade) period. 'Because we have got healthy 10 percent asset growth, a solid 7 percent profitability and a low impairment side, though slightly higher than last year, but broadly comfortable, Qatar-based Partner and Head of Financial Services for KPMG in the Middle East and South Asia, Omar Mahmood told The Peninsula.
'Its' true that a significant amount of deposits were withdrawn from banks during the post-June period; but the reality is that we have a double digit increase in deposits on year-on-year. However, liquidity will continue to be a challenge. With facing pressure in raising deposits and securing alternative sources, the banks will have to do more. But there is lot of opportunities in the market, he said.
With the new accounting rules kicking in, banks across the board will be looking to de-risk their legacy assets. It is going to be a general trend in the banking sector. The general view is that the banks are now looking at good reality check. Banks are forced to focus on efficiency, whether its cost-efficiency, de-risking or deleveraging and shifting focus on core business.
Commercial Bank is now focusing a lot on government businesses, several other banks are in the process of reducing their risk assets on contracting businesses and focusing on bluechip or core government projects.
The focus will be on high end projects and not the mass market they used to focus on.
Despite positive results, most banks' share prices have declined from a year ago. On this Mahmood said: ' We have seen a pattern of falling share-prices across most sectors of the economy, however this appears to be largely driven by sentiment as opposed to fundamental results, which are on whole, positive. Overall, banks' share prices performed better than non-banking listed entities, which is encouraging for the sector.
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